Asian Investors Are Watching Market Fluctuations

Asian investors are struggling to overcome the fluctuations in global markets experienced in recent days. This volatility is fueled by concerns over a bubble caused by artificial intelligence and uncertainties regarding U.S. interest rates.

November has been challenging for stocks due to increasing speculation about whether the rise led by technology companies has become overvalued. Companies like Amazon, Meta, Alphabet, and Apple, known as the Magnificent Seven, have played a significant role in reaching new peaks in Wall Street's major indices. However, any issues related to these companies pose a risk of creating significant impacts on the markets.

In this context, all eyes in the market will be on Nvidia’s earnings report on Wednesday, being one of the largest players in the sector. With a market valuation reaching $5 trillion this month, concerns are rising that a weak performance by Nvidia could act as a pin to pop the artificial intelligence bubble, causing anxiety among investors. Stephen Innes from SPI Asset Management noted that the days when we viewed the artificial intelligence complex as the engine of the rally in 2025 are behind us, and now it feels like sand has gotten into the gears of the engine.

Innes stated that the four consecutive losses of the S&P 500 index on Wall Street and the VIX fear index reaching the 25 level are indicators that investors are starting to worry about artificial intelligence. According to the results of a Bank of America investment manager survey, more than half of the managers believe that artificial intelligence stocks are already in a bubble.

However, BBC published an interview with Sundar Pichai, CEO of Alphabet, who stated that if the artificial intelligence bubble bursts, every company will be affected. Asia, which has been going through a difficult process, has recently gained some stability and the market has fluctuated between gains and losses. Tokyo is slightly up, but is held back by tensions in China and questions regarding Japan's financial situation.

Another significant development to watch throughout the week will be the release of U.S. data, particularly related to job creation. Investors will closely examine this data to understand the Federal Reserve’s plans regarding interest rates. Recently, investors have considered the possibility of a third consecutive interest rate cut, putting pressure on the markets.

Key data – as of 0230 GMT:

• Tokyo - Nikkei 225: up 0.8% to 49,077.49
• Hong Kong - Hang Seng Index: up 0.1% to 25,943.80
• Shanghai - Composite: up 0.2% to 3,947.68
• Dollar/Yen: down 0.01% to 155.52 yen
• Euro/Dollar: down 0.02% to 1.1577 dollars
• Pound/Dollar: down 0.01% to 1.3134 dollars
• Euro/Pound: up 0.06% to 88.15 pence
• West Texas Intermediate: down 0.3% to 60.58 dollars
• Brent Crude: down 0.3% to 64.67 dollars
• New York - Dow: down 1.1% to 46,091.74 (close)
• London - FTSE 100: down 1.3% to 9,552.30 (close)