Tech Under Pressure on AI Jitters, Dollar Slips: Markets Wrap

(Bloomberg) — Technology shares came under renewed pressure as sentiment toward the artificial intelligence trade remained jittery ahead of key earnings reports this week that will test the strength of gains in chip stocks. The dollar weakened.

South Korea’s Kospi Index — a bellwether for AI investments — dropped 3.5%, with chip heavyweight SK Hynix Inc. heading for its lowest close since April. MSCI Inc.’s Asia Pacific Index fell 1%, diverging from Monday’s tech-led gains on Wall Street. Sentiment appeared to stabilize, with S&P 500 Index futures edging up 0.2% after fluctuating between gains and losses. European shares were set to open 0.5% lower.

Adding to signs of pressure on the AI trade, data-center infrastructure company Elice Inc. plunged as much as 33% in its trading debut in Seoul.

“While the US market temporarily rebounded, for the overall market environment to fully clear up, we still need to see what happens in the upcoming earnings,” said Kazuyuki Muramatsu, head of investment management at Nagomi Capital. Elice’s slump “also hurts sentiment, signaling the environment surrounding neocloud companies has yet to fully improve,” he said.

Elsewhere, Treasuries held on to their losses from Monday, when reduced haven demand pushed yields higher. The yield on the benchmark 10-year US note stood at 5.14% after climbing seven basis points in US trading. French bonds also declined following violent unrest over the weekend.

The AI trade faces a fresh test this week as earnings from major technology companies, including Meta Platforms Inc. and Tesla Inc., offer clues on whether the rally has further room to run after concerns over heavy spending and higher interest rates rattled the sector. The backdrop also remains challenging, with elevated bond yields raising financing costs and oil prices adding to inflation concerns.

“The relief rally seen in US tech stocks overnight is failing to carry through to Asia,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc. “Investors are still in risk off mode, with rising bond yields and sticky energy prices being a key concern. Questions also continue to linger over the durability of the AI asset boom, with higher funding costs risking project delays or even cancellations.”

Netflix Inc. reports Tuesday, followed by Tesla, Meta and International Business Machines Corp. the following day.

The Philadelphia Semiconductor Index climbed 1.6% Monday, snapping an eight-day losing streak that was its longest since 2008. The gains helped the Nasdaq 100 Index recover from its worst week since the tariff turmoil of April 2025.

While chip stocks rebounded, about 65% of stocks on the S&P 500 Index declined.

“The rebound was driven primarily by technology stocks rather than a broad-based return of risk appetite,” Dilin Wu, a strategist at Pepperstone Group Ltd., wrote in a note.

In other corners of the market, gold was little changed at about $4,145 an ounce. Global crude benchmark Brent was steady near a five-month high as traders weighed the risk of further Iranian attacks in the Strait of Hormuz against robust crude flows from the Persian Gulf. The commodity traded at $109.80 a barrel.

The dollar declined against all of its Group-of-10 peers.

“Investors are also reluctant to take large positions ahead of earnings from key tech companies,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “With risk sentiment and the global growth outlook now closely tied to the AI trade, investors are likely waiting for those results before reassessing their positions on the US dollar.”

The euro is also on traders’ radars amid rising geopolitical risks in France.

French officials rolled out tougher security measures and pledged aid for businesses after cost-of-living protests over the weekend degenerated into violence, vandalism and looting. But a debt mountain and a budget deficit among the largest in the euro area mean the French government cannot simply increase spending to appease the public.

“Euro bulls are scarce these days,” Thomas Hempell, head of macro and market research at Generali Investments, wrote in a note. “With the war in Iran dragging on and French politics unresolved, a near-term euro rebound looks unlikely.”

Corporate Highlights:

Apple Inc. confirmed that it’s holding a product launch event on Oct. 28, where the company is planning to debut its first touch-screen MacBook. Nscale Ltd. was said to be in talks on a $45 billion computing deal with Anthropic PBC. Australia’s government is set to sue Facebook, TikTok and other major digital platforms for alleged non-compliance with a nationwide social media ban for under-16s, Communications Minister Anika Wells said in an interview. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 12:53 p.m. Tokyo time Nikkei 225 futures (OSE) fell 0.8% Japan’s Topix fell 1.1% Australia’s S&P/ASX 200 fell 0.5% Hong Kong’s Hang Seng fell 0.9% The Shanghai Composite was little changed Euro Stoxx 50 futures fell 0.6% Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1229 The Japanese yen rose 0.1% to 158.29 per dollar The offshore yuan was little changed at 6.6785 per dollar Cryptocurrencies

Bitcoin rose 0.1% to $81,998.43 Ether rose 0.5% to $2,409.95 Bonds

The yield on 10-year Treasuries declined one basis point to 5.13% Japan’s 10-year yield advanced 1.5 basis points to 2.920% Australia’s 10-year yield advanced four basis points to 5.26% Commodities

West Texas Intermediate crude rose 0.3% to $103.92 a barrel Spot gold rose 0.1% to $4,145.57 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Momoka Yokoyama, Aya Wagatsuma, Matthew Burgess and Ruth Carson.

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