Global Markets — Financial markets opened the week cautiously as investors assessed whether heavy spending on artificial intelligence could deliver sufficient returns, while falling oil prices and a packed corporate earnings schedule offered some support.
European stocks and the euro weakened on Monday amid political turmoil in France and growing uncertainty over the country’s public finances. The STOXX 600 dropped 0.7% by 0837 GMT, while France’s CAC 40 declined more than 1%.
The euro slipped 0.3% to $1.1203, remaining near last week’s 16-month low of $1.1113. In contrast, the U.S. dollar index advanced 0.2% to 101.9.
Declining oil prices helped cushion pressure across other markets. Brent crude futures fell 1.8% to $104 a barrel, while U.S. crude prices dropped 1.9% to $99.4 a barrel.
The oil market’s decline followed President Donald Trump’s decision to waive certain sanctions on Russia, a move that could increase fuel supplies. However, the policy’s ultimate effects remain uncertain, and geopolitical tensions continue to pose risks to energy shipments.
Investors are closely examining whether major technology companies can generate adequate returns from the enormous sums being invested in artificial intelligence infrastructure. Although AI-related businesses have benefited from strong market enthusiasm in recent years, concerns over financing expenses and profitability have grown.
Nasdaq futures rose 1.1%, while S&P 500 futures advanced 0.6%, pointing to a stronger potential opening on Wall Street following a difficult week for technology stocks.
The Philadelphia Semiconductor Index lost 11.4% during its recent losing streak, marking its longest such decline since 2008. The downturn has increased scrutiny of semiconductor companies and the sustainability of the broader AI investment cycle.
Meta is among the companies attracting investor attention ahead of its earnings announcement on Wednesday. Lam Research, Texas Instruments and Tesla are also due to report results, while SpaceX results are expected on Tuesday.
Goldman Sachs estimates that five major AI hyperscalers will collectively raise capital spending to approximately $1.2 trillion next year. The projected expenditure has fueled questions about how quickly these investments will produce additional revenue and profits.
Despite the concerns surrounding technology valuations, overall U.S. corporate earnings are still forecast to increase about 30%, with technology companies expected to account for much of the growth.
Bond markets have also reflected the uncertain outlook. The yield on the U.S. 10-year Treasury declined 2.5 basis points to 5.07%, extending a rally that had already delivered its largest weekly drop in more than eight months.
Across Asia, Japan’s Nikkei fell 0.6%, while South Korea’s market rose around 1.8%. Taiwan’s benchmark declined 0.6%, and Chinese blue-chip shares edged higher by 0.1% following stronger-than-expected economic growth data.
Investors are now assessing whether upcoming corporate earnings can justify elevated technology valuations as geopolitical tensions and financing costs remain high. This week’s results may offer a clearer indication of whether the AI investment boom can sustain the earnings growth needed to support broader market performance.
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