World stock exchanges are moving into a mode of increased caution: investors massively transfer capital from shares of technological giants to defensive sectors of the economy - health care, consumer goods and utilities. According to analysts, this movement of capital is a reaction to fears about whether the bubble in the artificial intelligence market is about to burst.
The Nasdaq Composite technology index, despite rising 8.7% year-to-date as of the close of trading on November 9, lost 5.3% in October and is still down 0.7% in November after falling into a correction zone last week. Markets closely related to semiconductor production were hit even harder: South Korea's Kospi index fell 16.2% in October, and has lost more than 8% since the beginning of November. The global MSCI World Information Technology index fell 7% in October and another 4.6% this month, while the MSCI U.S. technology index has fallen 11.5% since October. At the same time, indices of health care, consumer goods and utilities have grown significantly over the past month.
Why money is flowing out of the tech sector
Alastair Pinder, head of global equities and emerging markets at HSBC, called recent market moves "sharp and, in our view, excessive." According to him, the market is already pricing in increased project implementation risks and possible delays in capital expenditures by companies developing artificial intelligence. He noted that the U.S. semiconductor maker is trading at a forward price-to-earnings ratio of 13.5x, after a 45% drop in valuation since June, while shares of Walmart are trading at 40 earnings, near an all-time high, and Nvidia at just 13 earnings, near an all-time low.
AJ Bell chief investment officer Russ Mold described the markets as being on "high alert," judging by how investors are reallocating industry positions. According to AJ Bell's analysis of 11 "super-sectors" in the S&P Global 1200, the best performers in the second half of 2026 after energy (which benefited from higher oil prices due to the US-Iran war) were health care and consumer staples. Instead, the technology sector, which in the first half of the year was the growth leader (+28.4%), turned into the worst performer in the second half, losing more than 11%. "Technology has gone from the penthouse to the basement," Mold noted, adding that energy resilience and industrial weakness may reflect anxiety about the economic outlook next year and doubts about whether the AI bubble is bursting.
Last week, the pressure on the US technology sector was also increased by the victory of the Democrats in the mid-term elections for Congress. For Ukrainian investors who invest through global ETFs or shares of American companies, this regrouping of the market means that portfolios focused on tech giants such as Nvidia, Microsoft, Alphabet or Apple may show more volatility than before. You can monitor key macro events affecting investor sentiment in economic calendar Financier.
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