After Tech Sell-Off, Investors Brace for More Market Volatility

Following last week's steep sell-off of technology stocks, investors are bracing for further market turbulence at the start of this week, as they await several marquee corporate earnings reports and the results of the U.S. midterm elections.

Futures on the S&P 500, which allow investors to bet on the market before the official start of trading, rose slightly on Sunday night. In Asia, Australian stocks and Japan's benchmark index fell slightly.

The moves follow sharp losses at the end of last week, fueled by a sell-off in some of the well-known technology companies that have helped boost the stock market to a series of record highs in recent months.

Investors remain concerned about the amount of money the technology companies are spending to build the infrastructure to power artificial intelligence. Those concerns have intensified as companies have increasingly turned to debt markets to finance their spending, adding to the pressure on the companies should the immediate demand for A.I. fall short of expectations.

As companies have reported their financial results for the three months through September, investors have been paying particularly close attention to how much more money company executives think they will need to spend, balancing it against whether revenues have grown sufficiently from the money the companies have already spent.

Alphabet, Meta, Oracle and Amazon, which together account for four of the five "hyperscalers" driving the A.I. buildout, have all seen revisions to their lofty valuations in recent weeks, with investors punishing any appearance of profligacy. The average tech company has fallen 3 percent the day after it reported earnings for the three months through September, by far the worst tech performance of any quarter since Jefferies, an investment bank, started tracking the data 12 years ago.

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