Global markets enter the week on edge, preparing for another round of artificial intelligence-driven turbulence. After two weeks of sharp cross-sector swings—where software, wealth management and even credit-sensitive industries faced heavy selling pressure—the spotlight now shifts to Asia. New Delhi will host one of the most significant AI gatherings of the year, an event that could set the tone for global risk appetite. Against a backdrop of elevated valuations, sticky inflation and tighter financial conditions, even incremental announcements have proven capable of triggering outsized moves.

Europe’s Repricing: From Software Shock to Systemic Concern

Last week’s volatility in Europe offered a preview of how sensitive markets have become to AI-related disruption narratives. Shares of Dassault Systèmes suffered their largest single-day drop on record, while RELX posted its sharpest multi-session decline since 1988. Wealth managers including St. James’s Place, Aberdeen Group and Quilter also faced notable pressure.

The breadth of the selloff suggests that investors are no longer treating AI as a narrow technology theme. Analysts at UBS argued that the market reaction reflects “accelerating disruption extending well beyond software,” warning that credit implications remain only partially priced in. According to the bank, these risks could intensify through 2026 and into 2027 in the U.S., with Europe following to a lesser extent. In other words, what began as a valuation adjustment may evolve into a broader structural repricing.

Wall Street’s Divide: Doom Scenario or Evolutionary Shift?

Across the Atlantic, the tone is more nuanced. Dan Ives of Wedbush Securities pushed back against what he described on Squawk Box Europe as an exaggerated “software Armageddon” narrative. In his view, companies such as Salesforce and ServiceNow are positioned to be primary beneficiaries of the AI revolution rather than casualties.

This debate captures a deeper tension within equity markets. Is artificial intelligence a destructive force that compresses margins and erodes legacy business models, or a productivity engine that ultimately expands addressable markets? Historically, transformative technologies have generated acute volatility during early adoption phases, often concentrating value among dominant platforms. The challenge for investors lies in distinguishing between cyclical overreaction and genuine structural displacement.

New Delhi at the Center: Technology Meets Geopolitics

Attention now turns to New Delhi, where the AI Impact Summit is set to convene thousands of participants. Scheduled speakers include Dario Amodei of Anthropic, Brad Smith of Microsoft, Arthur Mensch of Mistral AI and Alexandr Wang of Scale AI. The event will be closely followed by CNBC.

Beyond keynote speeches, markets will be watching for tangible developments: cloud infrastructure deals, sovereign AI partnerships and enterprise-scale deployments. India’s combination of a vast digital consumer base, deep engineering talent pool and strong political backing positions it as a strategic battleground in the global AI race. For multinational tech firms, engagement in India represents not just commercial expansion, but geopolitical alignment amid intensifying U.S.-China competition.

Market Psychology: From FOMO to Fragility

Recent trading patterns underscore how quickly sentiment can shift. Over the past year, AI enthusiasm fueled aggressive multiple expansion as investors raced to avoid missing the next structural growth cycle. Now, each signal of potential disruption sparks rapid cross-asset adjustments. Algorithmic strategies and momentum-driven flows amplify these swings, turning narrative shifts into sector-wide rotations.

Should the New Delhi summit produce substantial partnerships or revenue-linked announcements, risk assets may find renewed support. Conversely, vague rhetoric without measurable commitments could reinforce the fragility already evident in parts of the market.

The Strategic Takeaway

This week represents more than another headline-driven trading cycle. It is a test of whether markets are navigating temporary volatility or the early stages of a broader structural transformation. Artificial intelligence is no longer confined to a single sector—it is reshaping capital allocation, credit assessment and geopolitical strategy. For investors, the imperative is not merely tactical positioning, but disciplined evaluation of where durable value will ultimately concentrate in an economy increasingly defined by algorithmic intelligence.