The AI-driven rebound on Wall Street is losing momentum, with technology stocks under pressure across Asia and Europe as investors reassess the risks surrounding the sector’s rapid expansion. U.S. stock futures also edged lower, signaling that Monday’s recovery may struggle to gain traction as concerns about financing costs and the sustainability of AI infrastructure spending return to the forefront.
South Korea has become a focal point of the latest sell-off. The Kospi closed in bear-market territory, while shares of Elice, a local AI data center company, plunged more than 30% in their trading debut. The weak performance adds to growing doubts about investor appetite for AI infrastructure businesses, with several data center operators reportedly shelving plans to go public. CoreWeave has also come under renewed pressure, highlighting the market’s sensitivity to rising borrowing costs and questions over future revenue growth.
The broader market picture is becoming more complicated as geopolitical tensions push energy prices higher. Brent crude climbed to around $111 a barrel, its highest level since May, amid escalating attacks in the Middle East and continued strikes on energy infrastructure in Europe. Higher oil prices could add to inflation concerns and keep pressure on bond yields, creating another headwind for technology stocks whose valuations are particularly sensitive to financing conditions.
Attention now turns to earnings from Netflix and SpaceX, both scheduled to report after the U.S. market closes. Netflix investors will be looking for signs of sustained engagement and a convincing outlook, while SpaceX faces scrutiny as a newly listed company trading above its IPO price but below its post-listing highs. Meanwhile, Nvidia is expanding its European AI footprint through new investments and partnerships in Germany, underscoring the industry’s ambition to broaden adoption even as investors become more selective about which companies can turn AI spending into durable profits.
