Markets are in a "state of alert," according to analysts monitoring a pivot from riskier tech sector bets into defensive stocks.
Technology stocks — a key driver of rallies in recent years — have been notably volatile in 2026. Concerns about artificial intelligence — particularly when it comes to capital expenditure, cash flow, debt and circular financing — have sparked multiple bouts of volatility this year.
The Democrats' sweep of Congress in the U.S. midterm elections amplified pressure on the sector last week.
Wall Street's tech-heavy Nasdaq Composite Index is up by around 8.7% since the start of the year as of Nov. 9 close, but gave up some of its year-to-date gains in October when it shed 5.3% over the course of the month. The index — home to Big Tech names including Nvidia, Microsoft, Alphabet and Apple — has staged a recovery in recent days, but remains in the red for November and is down 0.7% for the month so far after dipping into correction territory last week.
The Nasdaq isn't the only tech-focused index to have seen big losses over the past month. South Korea's Kospi index, which is heavily exposed to the semiconductor sector, lost 16.2% in October and is down more than 8% month-to-date.