After tech selloff, investors brace for more market volatility

After last week’s sharp selloff in tech stocks, investors are bracing for further market turmoil this week as they await several earnings reports from high-profile companies and the results of the U.S. midterm elections.

The S&P 500 fell half a percent on Monday. The tech-heavy Nasdaq Composite index, more reflective of recent anxiety, fell more than 1 percent.

In Asia, stocks were mixed, with South Korea’s benchmark stock index, dominated by makers of microchips that have fueled the artificial intelligence boom, rising more than 2%. Hong Kong’s Hang Seng posted a modest gain, but stocks in Japan and Taiwan fell slightly. Europe’s Stoxx 600 index, which tracks the region’s largest companies, moved between small gains and losses.

The moves suggest markets are still fragile after steep losses late last week, fueled by a selloff in some of the well-known technology companies that helped support the stock market to a series of record highs in recent months.

Developments in Middle East peace talks over the weekend helped push oil prices lower on Monday, with Brent crude, the international oil benchmark, falling more than 8 percent to around $104 a barrel.

But investors still have a long way to go. They remain concerned about the amount of money tech companies are spending to build AI infrastructure. These concerns have intensified as companies increasingly turn to debt markets to finance their spending, increasing pressure on businesses if immediate demand for AI does not meet expectations.