World stock markets recovered slightly from six-month lows on Monday, though the atmosphere remained fragile as a decline in Nvidia shares compounded the uncertainty surrounding the AI sector following global markets.
Global equities have faced significant pressure in recent weeks as the AI-driven trade faltered amid rising interest rates. Additionally, sweeping Democratic wins in the US midterm elections have intensified concerns regarding potential increases in the regulation of AI and data centers.
Analysts noted that the outlook remains cautious, with the selloff in Nvidia shares serving as the latest test of investor sentiment.
“For now, the repercussions across the wider chip industry look relatively limited although the scandal could disrupt the tech rebound,” said Susannah Streeter, chief investment strategist at investment platform the Wealth Club.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.25% following a 4.6% decline last week. Taiwan’s benchmark index rose nearly 5% after experiencing its sharpest weekly drop in two decades during the previous period.
These movements left the MSCI World Stock Index up 0.4%, maintaining its position above the six-month lows reached last week.
Earnings reports scheduled for this week from tech firms such as CoreWeave, Applied Materials, and Cisco Systems are expected to test the profitability of AI ambitions as companies grapple with the massive costs of infrastructure build-outs.
CoreWeave has emerged as a key indicator of investor anxiety regarding AI, and the cost of insuring its debt has recently spiked into distressed territory.
“The only fundamental this week that matters is price,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne.
“You could easily see a lot of people going, ‘You know what, now’s the time to buy — blood on the streets. It’s not as bad as everyone thinks,'” he said. “It will be driven by flow, and fundamentals will mean very little.”
Brent crude dropped 2% to $96.29 per barrel after US President Donald Trump stated on Sunday that he was highly unlikely to order new attacks on Iran while talks to resolve the conflict remain ongoing.
