26/10/2026
Asian stock markets fell early on Monday following a turbulent week, with investors closely watching earnings from large-cap stocks, which will test AI trading sentiment and key policy decisions from major central banks.
The MSCI Asia Pacific Index dipped 0.2% as the region kicked off its busiest earnings season of the quarter. U.S. stock futures erased early gains and finished nearly flat.
Wall Street closed lower on Friday amid broad pressure on AI-related trades. The U.S. semiconductor index posted its longest losing streak since November last year, setting a weak tone for Monday’s Asian opening.
SK Hynix edged higher on news that the chipmaker plans to return roughly 80% of proceeds from selling its stake in Kioxia of Japan to shareholders via a special dividend.
Brent crude retreated about 1% from a six-month high to around $115.60 per barrel. U.S. President Donald Trump stated that rising threats from Iran and the Houthi rebels against American personnel in the Middle East meant “the time has come to make a decision.” The U.S. now faces two choices: strike a deal with Tehran or resume military strikes against Iran.
In currency markets, CME foreign exchange futures data showed growing bearish bets on the Brazilian real after Luiz Inácio Lula da Silva won the second round of Brazil’s presidential election. The euro edged higher after France avoided a downgrade from Moody’s Investors Service.
After sharp swings in AI trades, investors face another pivotal week. Earnings from Microsoft, Alphabet and Amazon will put market confidence in the AI sector to the test. Policy decisions from the Federal Reserve and Bank of Japan will serve as major market drivers, as policymakers grapple with persistently high inflation, surging energy costs and elevated bond yields worldwide.
The Fed, European Central Bank and Bank of Japan are widely expected to keep interest rates unchanged this week, opting to wait before considering further rate hikes. The Fed’s three-day policy meeting kicking off in Washington on Wednesday is likely to maintain a hawkish stance while staying on hold, as officials confront inflation risks ranging from spiking oil prices to the AI investment boom.
The Fed delivered its first rate hike since 2023 in September and signaled another hike could come later this year. Even with sticky U.S. inflation, policymakers have shown no urgency to raise rates again this week, with economists and investors pricing in the next increase for December.
South Korea’s stock market will be in sharp focus across Asia. Goldman Sachs strategists cut the target price for the KOSPI by 25% amid growing worries over AI trading.
This week also marks the peak of Asia’s earnings season. Around 550 out of the roughly 1,200 constituents of the MSCI Asia Pacific Index are scheduled to release quarterly results, including leading AI chipmakers such as SK Hynix and Samsung Electronics.
Geopolitical risks are set to remain elevated next month. Trump has hinted the U.S. may resume strikes against Iran after the midterm elections on November 3. Officials warn the period between the election and the inauguration of the new Congress will be particularly risky.
Amid escalating attacks by Iran and its Houthi allies, the U.S. has reduced diplomatic and military staff in parts of the Middle East. Riyadh’s airport, which was repeatedly targeted by Houthi missile strikes, reopened commercial flights on Sunday.
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