Asian markets wobble as AI-linked stocks face fresh sell-off and oil dips on Iran talks

Asian stock markets were uneven on Monday, reflecting lingering pressure from last week’s disappointing earnings at major technology companies and growing attention on the United States ahead of the upcoming midterm elections.

Investors sold off AI-linked firms after Wall Street leaders such as Amazon, Alphabet and Microsoft indicated they would continue heavy investment in data centres and chips, even as market participants grew impatient for near-term returns. Analysts estimate that the companies, together with Meta, are set to spend more than $700 billion on capital projects this year, much of it directed toward AI infrastructure.

Bloomberg data showed that 90 % of software firms in the S&P 500 beat earnings expectations this quarter, but only 70 % topped revenue forecasts, raising questions about whether the scale of spending may have been excessive.

Technology earnings are in focus, with Apple, Advanced Micro Devices and Palantir slated to report later in the week. In Japan, chipmaker Kioxia fell nearly 16 % after issuing a cautious outlook that missed analysts’ forecasts, extending a decline that has taken the stock about 70 % from its June peak, though it remains up more than 200 % year-to-date. Taiwan’s TSMC rose close to 2 %, while South Korea’s Samsung and SK Hynix gained 1.8 % and 3.8 % respectively.

The mixed tech performance was mirrored across regional indices: Tokyo, Sydney, Singapore, Wellington, Bangkok and Taipei slipped, whereas Seoul, Hong Kong, Shanghai, Mumbai and Jakarta posted gains.

Oil prices dropped roughly three percent after reports that President Donald Trump preferred negotiations with Iran to resume hostilities, a stance that disappointed Israeli Prime Minister Benjamin Netanyahu. The news also cited a letter from Vice President JD Vance to Iran’s national security chief Mohsen Rezaei, marking a high-level diplomatic outreach.

"Despite the stalemate outcome following the Israeli elections, the chances of a diplomatic breakthrough may be improving following intensified mediation efforts by Qatar and regional allies," said Razan Hilal of FOREX.com.

Trump later hinted at possible military action while campaigning, stating, "The only reason why I'm not finished with Iran is I want to be nice. I want to try and save all those lives if I can ... But at some point we're going to have to give them the hammer."

Iran’s army spokesman Mohammad Akramini warned that any renewed conflict could be longer than the previous round and that the American president would not be able to dictate its timing or conditions.

Investors also kept an eye on the U.S. midterm elections, where polls suggest Democrats are poised to regain control of the House of Representatives and potentially win Senate seats, setting up a congressional check on President Trump’s agenda.