The correlation between crude oil and the Nasdaq has completely reversed: the market’s macro logic has shifted.

Over the past one to two months, the market followed a clear联动 pattern: escalating geopolitical tensions in the Middle East—particularly involving Iran—spurred a rapid rise in crude oil prices, which coincided with strength in the Nasdaq Index. The underlying logic was as follows: high oil prices hurt global traditional manufacturing sectors and squeezed economies such as those of Europe, Japan, and South Korea; as a result, global risk-averse capital flowed outward and continuously repatriated to the U.S., concentrating heavily in the AI and technology sector—thereby lifting the Nasdaq. During this phase, geopolitical tensions and rising oil prices were effectively bullish for U.S. tech stocks. However, last week, this established linkage broke down. Even as Iran-related tensions escalated again and oil prices surged, the Nasdaq and South Korean equities failed to rally—in fact, both weakened and declined simultaneously. High oil prices no longer drove capital inflows into the AI sector; the supportive effect previously conferred by geopolitical-driven price spikes had essentially vanished. In the most recent trading session, market logic has undergone a complete reversal: crude oil plunged 7% intraday, and geopolitical risk premiums rapidly dissipated—yet Nasdaq futures surged sharply. Falling oil prices are no longer bearish for tech stocks; instead, they have become a positive catalyst for the Nasdaq. This reversal stems fundamentally from the AI industry itself entering a cyclical downturn, with its potential returns significantly diminished. In the prior phase, AI was in an expansionary upcycle—industry sentiment remained robust, and investors willingly added positions amid global risk aversion. But after a substantial rally, AI valuations reached elevated levels, while expectations for capital expenditure returns continued to be revised downward. Consequently, these long-duration, high-valuation assets became markedly more sensitive to inflation and interest-rate movements. At this juncture, the negative pressure from rising oil prices now outweighs any benefit from capital repatriation: higher oil prices lift broad-based inflation expectations, pushing up U.S. Treasury yields—and growth-oriented assets like AI stocks, whose valuations rely heavily on distant future cash flows, are extremely sensitive to rising yields, facing direct discounting pressure that suppresses valuations. Simultaneously, surging energy costs for data centers further squeeze profit margins across the AI supply chain.

AI trading gets temporary breathing room; South Korean equities rise 1.8%; Nasdaq futures rebound; oil retreats from highs; U.S. Treasuries rally.

Following a broad selloff in tech stocks, markets sought breathing room—and this week’s earnings reports from major technology companies will serve as a critical test. Oil retreated from a five-month high, while safe-haven demand supported a rally in U.S. Treasuries. Across Asia-Pacific equities, the MSCI Asia-Pacific Index erased its early-session losses to close nearly flat. South Korea’s KOSPI rose 1.8%, Japan’s Nikkei 225 fell 0.6%, and the Topix edged up 0.04%. European equity futures edged lower, weighed down by large-scale protests over the weekend in France—which also dragged the euro lower against most G10 currencies. Bitcoin rose over 2%, climbing above $82,500. Nasdaq-100 futures gained 1.3%, and S&P 500 futures rose 0.8%—both indices having suffered sharp declines last week. During that selloff, the closely watched semiconductor index recorded its longest losing streak since 2008, while the volatility index posted its largest weekly gain since June. This week, earnings from U.S. tech giants—including Tesla and Meta—are set to be released, widely viewed by the market as a key barometer for the viability of the AI trade. Kyle Rodda, Senior Analyst at Capital.com in Melbourne, described current conditions as a ‘classic period of heightened uncertainty’: ‘Multiple factors are colliding simultaneously—the imminent AI-related earnings season, persistent ambiguity around interest-rate direction, and just weeks remaining until the U.S. midterm elections.’ South Korea’s KOSPI rose 1.8%, Japan’s Nikkei 225 fell 0.6%, and the Topix rose 0.04%. Nasdaq-100 futures rose 1.3%, and S&P 500 futures gained 0.8%. The yield on 10-year U.S. Treasuries fell one basis point to 5.06%; Japan’s 10-year JGB yield dropped 2.5 basis points to 2.905%. The yen was virtually unchanged at 158.07 per dollar. Spot gold rose 0.4% to $4,180 per ounce. Spot silver surged as much as 1.5% intraday, reaching $57.80 per ounce. Brent crude fell roughly 1.8% on Monday to $107.85 per barrel—retreating from its five-month high. AI Earnings Week Arrives—Markets Seek Direction This week brings a concentrated wave of earnings reports from major U.S. tech firms—directly testing investor confidence in the AI trade. Netflix kicks off on Tuesday, followed closely on Wednesday by Tesla, Meta, and IBM. According to Bloomberg, multiple strategists view this week’s results as pivotal. Mark Cranfield, Strategist at Bloomberg MLive, stated: ‘Investor sentiment remains cautious amid ongoing geopolitical flux—and this is also a major earnings week, including Meta—the new benchmark for the AI theme.’

Nasdaq Futures Rebound From Tech Selloff, Oil Dips: Markets Wrap

Oct 18, 2026

US equity futures rebounded from a tech selloff while crude oil prices retreated from five-month highs. Market volatility continues driven by AI earnings, inflation concerns, and geopolitical risks affecting energy and commodities.

bloomberg

Nasdaq Futures Rebound From Tech Selloff, Oil Dips: Markets Wrap

FAQ