Asian markets fell at the start of the last full trading week in 2025 as concerns over the profit outlook of technology companies and their heavy spending on artificial intelligence weighed on sentiment. The MSCI Regional Stock Index fell 0.7%, with shares in South Korea, a model of artificial intelligence momentum, down 1.5%, following a sell-off led by tech stocks on Wall Street on Friday. In a sign of possible stability in the markets, US stock index futures rose 0.2% in Asian trade on Monday. Chinese indices also fell slightly after the latest data showed retail sales growth was the weakest since the Corona pandemic, while investment continued to fall. Gold continued its gains for a fifth day in a row, after mixed statements by Federal Reserve officials prompted traders to reduce their bets on further monetary easing in the United States over the next year. Gold has jumped more than 60% this year, while silver has more than doubled, with the two metals on track for their best annual performance since 1979. Fears of an artificial intelligence bubble weighing on morale Risk appetite has waned globally amid growing skepticism about the ability of tech stocks, which has only boosted their levels from global indexes and aggressive spending. artificial intelligence. Asian markets, which have been among the strongest performers this year, appear more vulnerable to risks given the region’s heavy reliance on manufacturing components that underpin the technology boom. Friday’s moves “highlighted the possibility that we will see the AI ​​bubble burst at some point in the near future,” said Nick Tweddell, chief market analyst at AT Global Markets in Sydney. He added: “We’ve seen good growth in the Asian markets over the past year, driven by AI in particular and technology in general, despite trade concerns, so I expect that to taper off significantly in today’s trade.” From the recent wave of selling in Nvidia shares, to the decline in Oracle shares after announcing increased spending on artificial intelligence, to weakening sentiment regarding a network of companies exposed to Open AI, signs of doubt are mounting. Also Read: Oracle Shares Fall As Its Artificial Intelligence Spending Rises Looking ahead to 2026, a debate is taking place among investors on whether to reduce exposure to artificial intelligence in anticipation of a possible burst of the bubble, or double down on the bet to take advantage of this transformative technology. Concerns surrounding artificial intelligence include the enormous cost of developing it as well as the uses of this technology, and whether consumers will ultimately pay for these services. The answers to these questions will have major implications for the future of stock markets. “The year-end seasonal rally may not take off amid fresh concerns about AI valuations,” said Kyle Rodda, senior analyst at Capital.com. He added: “Although the risks are not at the level of what we saw last week, there are enough uncertainty factors to keep investors in a state of anticipation, and perhaps trigger a year-end rally, or deepen the selling wave.” Bloomberg Strategists’ take: Garfield Reynolds, head of the Asia team at Bloomberg Markets Live, expects “global stocks to fall this week as the shift to tighter monetary policy in many regions of the world leads to the withdrawal of one of the key factors of support, at a time when concerns about this year’s artificial intelligence boom are dampening this year’s boom.” He added: “Stocks also face a reasonable possibility that this year’s peaks have already been reached, prompting investors to instead take profits and convert them into liquidity.” US Treasuries steadied on Monday, at a time when controversy raged in markets and among Federal Reserve officials over the amount of monetary easing expected next year. Cleveland Fed President Beth Hammack said she would prefer interest rates to be a little tighter to keep pressure on inflation. On the other hand, Chicago Federal Reserve Bank President Austin Goolsbee said he expects interest rates to cut at a faster rate in 2026 than many of his colleagues expect. Weak Chinese data In China, retail sales rose 1.3% year-on-year in November, while economists polled by Bloomberg had expected the growth rate to remain at 2.9% for the second straight month. Chetan Seth, equity strategist at Nomura Holdings, said in an interview with Bloomberg TV that “corporate profits are likely to remain at weak levels.” Also read: The Chinese president attacks the inflated growth figures and warns about useless projects. A $3 billion bailout crisis in the east of the country has also revived concerns about the poorly regulated shadow banking sector, as the country’s prolonged real estate recession threatens to spill over into the financial sector. A series of major monetary policy meetings from central banks, including the Bank of England and the Bank of Japan, are expected this week.