Asian equity markets climbed on November 2, 2026, as global oil prices plummeted and investors weighed the risks of artificial intelligence spending. While South Korean indices surged, Japanese technology stocks faced significant pressure following a brutal week for Wall Street.
Kioxia's 14% plunge and the AI profitability panic
The technology sector remains a primary source of instability as investors question whether massive investments in artificial intelligence will yield timely returns. As reported, Japan's Nikkei 225 index closed down 0.1% at 63,218.02, dragged lower by SoftBank Group's 1.8% decline and a steep 14% drop for memory chipmaker Kioxia Holdings. The Kioxia Holdings collapse followed earnings forecasts that failed to meet the high growth expectations of analysts.
This volatility reflects a broader trend of skepticism regarding the "AI infrastructure buildup," which some market participants now fear resembles a speculative bubble. This sentiment was reinforced by recent earnings reports from Amazon and Alphabet Inc. (Google's parent company), which triggered a sell-off in AI-related assets on Wall Street. However, the trend is not uniform ; South Korea's Kospi index rose 2.3% to 5,859 .83, supported by gains from Samsung Electronics (+1.7%) and SK Hynix (+4.2%).
The 3.3% oil slide and the Strait of Hormuz proposal
Commodity markets experienced a sharp correction on Monday, with Brent crude falling 3.3% to $109.66 per barrel and U.S. crude dropping 3.3% to $100.64. According to the report, this decline was sparked by diplomatic activity in Qatar, where an Iranian diplomat indicated that negotiators are discussing a proposal to reopen the Strait of Hormuz within two days.
The potential stabilization of shipping routes in the Middle East has eased immediate supply concerns, though the geopolitical situation remains fragile. The Iranian official clarified via Telegram that no direct negotiations are occurring with the United States, meaning the success of this proposal depends entirely on how the U.S. government responds to specific Iranian queries. This tension continues to act as a primary driver for energy price fluctuations.
Shanghai's 1.2% rise despite October's factory contraction
China's markets showed resilience despite disappointing domestic economic indicators. The Shanghai Composite index rose 1.2% to 3,640.93, even as official data revealed that Chinese factory activity returned to contraction territory in October. This divergence suggests that investors may be pricing in anticipated government intervention rather than current economic performance.
To combat the slowdown,China's central bank and its securities regulatory body scheduled meetings with financial institutions on Monday to discuss capital market support measures.. This move highlights the ongoing struggle of the Chinese economy to balance slowing internal demand with the need for policy-drivn stimulus to maintain market confidence.
A 2.9% Nasdaq crash and the Tuesday midterm shadow
The movements in Asia were heavily influenced by a catastrophic Friday on Wall Street, where the Nasdaq composite plummeted 2.9% and the S&P 500 fell 1.8%. This turmoil has left investors on edge as they await Apple's earnings report and the results of the U.S. midterm elections on Tuesday.
The upcoming elections are expected to be a pivotal moment for market sentiment, as voters have expressed growing concern over inflation, data centers, and the societal impact of AI. Currency markets have already reacted to this instability, with the U.S. dollar rising to 157.91 Japanese yen. A critical unknown remains how the U.S. election results will shift policy directions regarding AI regulation and energy independence, which will likely dictate the next phase of global market volatility.
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