Global financial markets opened the week under intense pressure as geopolitical tensions intensified around Iran, while enduring jitters surrounding artificial intelligence financing drove a broad sell-off across international tech stocks and semiconductor manufacturers.
Middle East Conflict Threats Rattle Oil Markets
Energy markets faced renewed turbulence as the threat of renewed conflict in the Middle East rattled supply chains. Brent petrol declined from a six-month peak, sliding roughly two percent to approximately 114.35 dollars per barrel, according to market data tracked by Bloomberght. The geopolitical backdrop remained charged after Donald Trump, speaking outside the White House while en route to a campaign rally in Iowa, pointed to severe damage inflicted on Iran and remarked on the potential for further military escalation prior to the upcoming November 3 elections.
Donald Trump told Yenisafak, Maybe we can go a little further.
Simultaneously, Iran-backed Houthi forces continued their targeting of Saudi Arabia. Suudi Arabistan öncülüğündeki Arap Koalisyonu Sözcüsü Tümgeneral Turki el-Maliki reported that a ballistic missile launched by the Houthis toward Riyadh was intercepted and destroyed by air defense systems. AT Global Markets Chief Market Analyst Nick Twidale noted that investors were bracing for a new and intense week
according to Yahoo as the focus pivots back toward central banks and interest rate trajectories following weeks of geopolitical dominance across trading desks.
AI Profitability Concerns Trigger Chipmaker Sell-Off
Technology equities bore the brunt of the global downturn, led by sharp declines in major chipmakers and artificial intelligence infrastructure providers. In the United States, Intel shares dropped 8.04 percent, Advanced Micro Devices tumbled 8.10 percent, Qualcomm lost 2.88 percent, Broadcom fell 4.31 percent, and Micron Technology declined 6.26 percent during the previous session. Analysts highlighted that the core anxiety centers on whether massive capital expenditures in artificial intelligence will translate into sustainable profitability within a reasonable timeframe, compounded by higher borrowing costs that make debt-financed data center expansions significantly more expensive.
The contagion quickly spread across international exchanges. In Asia, South Korea’s Kospi index fell one percent alongside a decline in Samsung Electronics, prompting Goldman Sachs strategists to slash their Kospi targets by 25 percent amid deepening sector uncertainty. Japanese markets saw heavy selling concentrated in semiconductor shares on the Nikkei, while Chinese artificial intelligence model developers also retreated.
S&P 500 Ends Long Period of Stability
Examining the broader market structure, Dr. Sarak noted that the S&P 500 recently concluded its longest calm period since January 2020, going 53 sessions without a single decline exceeding one percent before ending that streak with a 1.1 percent pullback. Dr. Sarak pointed out that VIX fear index positions have drifted back toward levels seen in the summer of 2024, signaling that investors are quietly putting up defensive umbrellas against a potential storm. Addressing the ongoing debate over whether artificial intelligence represents a financial bubble, Dr. Sarak observed that while high valuations, narrow market leadership, and debt-financed investments share surface similarities with past speculative eras, strong underlying corporate earnings separate the current environment from the 2000 dot-com crash.
Historical data compiled from past 53-session calm periods dating back to 1950 indicates that the immediate month following such stability is historically weak, with gains typically halved over a three-month window before two-thirds of cases recover across a one-year horizon according to the analysis. Against this volatile backdrop, safe-haven demand pushed United States Treasury yields lower, with the benchmark 10-year yield easing 3 basis points to 4.96 percent as investors weighed political risks on both sides of the Atlantic.