AI Stock Rout Tests Wall Street as Fed, ECB and Bank of England Weigh Energy-Driven Inflation

Tech shares remain volatile after last week's AI-led sell-off following the US midterms, while central banks grapple with energy-driven inflation: the Bank of England hiked to 4%, the Fed and ECB held. US inflation data and AI earnings come this week.

Maz Vantage · 9 Nov 2026

Wall Street and the AI trade

Technology shares have dominated market sentiment. A sell-off in the US on Thursday was most pronounced on the Nasdaq, home to Alphabet, Nvidia, Meta and Apple. It followed sweeping Democratic gains in the midterm elections, which gave the party full control of Congress; investors appear worried that some Democrats' campaigns against the unhindered expansion of data centres could mean more AI regulation, although concerns about the industry's returns had been building for some time (BBC).

On Friday the Nasdaq closed in positive territory after the rout, which had spilled over into Asian and European markets. The S&P 500 and the largest chip names recovered some ground, but South Korea's Kospi closed down 6%, with SK Hynix falling more than 10%, and the main indexes in Germany, France and Spain ended lower (BBC). US employers added a better-than-expected 165,000 jobs in September, according to the same report. The Guardian framed the episode as a question of whether an AI bubble is deflating (The Guardian).

Company-specific AI news adds to the picture. Nvidia's board has opened an independent investigation after reports that CEO Jensen Huang had a relationship with a woman US intelligence officials believed to be a Chinese spy; the board said it had no reason to believe company secrets or national security were compromised, and Huang apologised publicly (BBC). Oracle shares are down around 42% in 2026, their biggest calendar-year slide since 2001 (Nasdaq).

The week ahead

European stocks were seen opening slightly higher on Monday, ahead of key US inflation data and earnings from AI-linked companies including CoreWeave, Cisco and Applied Materials later in the week (Nasdaq).

Central banks: energy prices drive policy

The Federal Reserve held its target range at 3-3/4 to 4 percent on 28 October by a 10-2 vote. Lisa Cook and Beth Hammack dissented, preferring a quarter-point increase. The statement describes activity as expanding at a strong pace and inflation as elevated (Federal Reserve).

The European Central Bank left its deposit rate at 2.50% on 29 October, saying rising energy prices pose upside risks to inflation and downside risks to growth, and that it is not pre-committing to a rate path (ECB). The ECB also announced that President Christine Lagarde will step down on 7 February 2027 (ECB).

The Bank of England raised Bank Rate by 0.25 points to 4% on 4 November, by an 8-1 vote; one member wanted a 0.5-point rise. It cited energy prices rising in the ninth month of the Middle East conflict, and expects UK CPI inflation, at 3.5% in September, to reach around 5% by mid-2027 (Bank of England).

Europe, Asia and corporate news

German exports rose by more than expected in September (Investing.com). UniCredit reported third-quarter profit above expectations and raised its annual guidance (Investing.com); it also plans a new governance structure at Commerzbank in the first quarter, as it targets full consolidation (Nasdaq).

In Asia, Japan's Mazda returned to a first-half profit and confirmed its outlook, though its shares fell (Nasdaq). Indian shares were slightly lower after last week's strong rally (Nasdaq). In the US, retailer The Children's Place filed for Chapter 11 bankruptcy (Nasdaq).

Sources

Wall Street and the AI trade

Central banks: energy prices drive policy

Europe, Asia and corporate news