Global week ahead: Markets brace for more AI noise and 'scare trading'

• European software and analytics firms were hit hard, with RELX recording its worst session decline since 1988, while wealth managers also suffered significant losses
• UBS analysts warn that AI-driven disruption is accelerating beyond software and credit implications remain only partially priced in, with risks expected to increase through 2026-2027
• India's AI Impact Summit is expected to yield major partnership announcements and cloud deals as tech giants target India's large customer base and engineering talent pool

Summary

Key Event: Global markets prepare for continued volatility as the AI Impact Summit convenes in New Delhi, India, amid ongoing sector-wide disruption fears triggered by recent agentic AI developments.

Major Developments:

Recent weeks have seen significant AI-driven sell-offs across multiple sectors beyond software, including credit, transport, real estate, and wealth management. European markets were particularly affected, with British analytics firm RELX experiencing its worst single-session decline since 1988. Wealth managers including unnamed firms suffered substantial losses.

Featured Companies & Speakers:

• Anthropic (CEO Dario Amodei)
• Microsoft (Brad Smith)
• Mistral AI (Co-founder Arthur Mensch)
• Additional participants from major tech firms

Market Implications:

UBS analysts warn that markets have only partially priced in credit implications from AI disruption, expecting risks to escalate through 2026-2027, primarily in the U.S. and to a lesser extent in Europe. The bank emphasizes that disruption is accelerating well beyond the software sector.

Contrasting this view, Wedbush's Dan Ives characterizes the "software Armageddon" scenario as overblown, arguing that established players will participate in rather than be cannibalized by the AI revolution.

Expected Outcomes:

The India summit is anticipated to yield major announcements including cloud deals, AI infrastructure investments, and government-tech collaborations. India's large tech-forward customer base and engineering talent pool are key attractions for global tech giants, with Prime Minister Modi expected to actively court Big Tech participation.

Trading Outlook: Investors should anticipate continued volatility and "scare trading" as markets digest summit announcements and reassess sector exposure to AI disruption risks.