After last week's sharp sell-off in US technology shares, most Asia-Pacific markets recovered on Monday, with US equity futures also strengthening, signaling tentative stabilization in risk sentiment.
Major Asian stock markets mostly closed higher, with South Korea's KOSPI gaining 2.24% and the MSCI Asia-Pacific index edging up 0.1% overall. Nasdaq 100 futures rose more than 1%, S&P 500 futures advanced 0.53%, and European equity index futures also followed higher. This helped ease concerns that the downturn in technology shares could spread further. Previously, the Nasdaq 100 plunged 3.5% on Friday, its worst single-day performance since March 2025, while the Philadelphia Semiconductor Index plummeted 7.2% the same day.
Falling oil prices also provided support for market sentiment. According to reports, US President Trump wants to wait until after Tuesday's midterm election results before assessing whether to resume military strikes on Iran, preferring to give diplomatic efforts more time. WTI crude fell 4.0% intraday to $99.95 per barrel, while Brent crude broke below the $109 per barrel mark to $108.99. Meanwhile, gold rose 0.8% to $3,906 per ounce, rebounding after touching its lowest closing level in over a year last Friday.
European stocks opened mostly lower, with the Euro Stoxx 50 up 0.03%, the UK FTSE 100 down 0.22%, France's CAC 40 down 0.06%, and Germany's DAX down 0.12%.
Japan's Nikkei 225 closed down 0.3% at 63,081.86. The TOPIX ended 0.9% lower at 3,930.28. South Korea's KOSPI closed up 2.24% at 5,859.07.
US equity index futures collectively moved higher, with Nasdaq 100 futures up more than 1%, S&P 500 futures up 0.53%, and Dow Jones futures up 0.41%.
The euro rose 0.5% against the dollar to 1.1214, its largest gain in more than two weeks.
The US 10-year Treasury yield was little changed at 4.92%.
Japan's 10-year yield rose 1.5 basis points to 2.770%.
WTI crude fell 4.0% intraday to $99.95 per barrel, while Brent crude broke below the $109 per barrel mark to $108.99.
Spot gold rose 0.77% to $3,906.50 per ounce.
Bitcoin gained 0.6% to $78,259.88.
Asia-Pacific Markets Mixed as Tech Sector Leads Rebound
Asia-Pacific markets showed mixed performance on Monday. South Korea's KOSPI rose 2.24% to 5,859.07, while Australia's benchmark index declined, with the MSCI Asia-Pacific index up a modest 0.1% overall. Japan's market weakened, with the Nikkei 225 closing down 0.3% at 63,081.86 and the TOPIX falling 0.9% to 3,930.28.
Japanese semiconductor memory chip maker Kioxia Holdings Corp. saw its shares plunge as much as 17% during Tokyo trading, after the company issued a cautious outlook, intensifying concerns that AI-driven explosive growth momentum is leveling off. HashKey Capital portfolio manager Chaltan Wang said Asian stocks recovered "some lost ground as dip buyers returned to certain tech names." He also noted that "the core question is whether what we are witnessing is merely a short-term correction in this popular tech trade, or the beginning of the market reassessing all AI-related investments."
AI Narrative Questioned as Investor Tolerance Wanes
Friday's sell-off in US technology shares reflected fading patience among investors toward companies whose core businesses are slowing but that continue making aggressive bets on AI spending. Earnings reports last week from Alphabet and Amazon.com triggered market concerns that AI investments are eroding profitability in the core businesses funding them. Oaktree Capital Management co-chairman Howard Marks said in a Bloomberg Television interview that recent AI-related market volatility has partly punctured the sector's "invincibility" myth. Morgan Stanley chief equity strategist Mike Wilson argued that the decline may offer an entry opportunity. He said several "clearing events" ahead could temporarily push prices lower, creating opportunities for investors to add positions. Lombard Odier Investment Management head of macro research Florian Ielpo also took a relatively optimistic stance, saying the adjustment "looks more like a valuation-driven bull market rotation rather than the start of broad market deterioration."
Multiple Risk Events Loom, Market Volatility Likely to Persist
Markets currently face several key dates. The US midterm elections will be held Tuesday, and Nvidia's earnings report is scheduled for later in November, both of which could trigger a new wave of volatility. The Cboe Volatility Index (VIX) already touched its highest intraday level since April last week, demand for put options hedging against further declines surged, and stock correlations also climbed, all indicating rising market stress. However, these indicators remain well below peak levels seen after the joint US-Israeli strikes on Iran in March. In currency markets, the dollar was mixed against G10 currencies, while US Treasury prices moved marginally. OCBC bank Singapore FX strategist Moh Siong Sim said "the dollar remains caught between the forces of AI and oil prices," with a modest Nasdaq futures rebound providing some support, while softer oil prices help ease inflation expectations, though the November 3 midterm elections pose additional risk. He added: "We maintain a constructive view on the dollar, but risks are becoming more two-sided."
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