Asian stocks were mixed on Monday as investors geared up for a crucial run of central bank decisions and tech earnings, while oil prices retreated from a six-month high.
AI-linked firms continued to struggle amid worries about the sustainability of the colossal investment boom that pushed stock markets to multiple record highs in the first half of the year.
Traders are growing increasingly worried about when the vast sums pumped into the sector will see returns, if any, while rising interest rates and bond yields are now calling companies' finances into question.
This week sees the release of earnings from US titans and Magnificent Seven members Amazon, Microsoft and Alphabet, as well as South Korean chipmakers SK hynix and Samsung.
Results from Tesla and Meta last week further stoked spending worries and helped drag stocks lower.
"The AI complex remains under a microscope ahead of what may be the most important stretch of earnings season so far," said SPI Asset Management's Stephen Innes.
"Microsoft, Alphabet and Amazon are about to walk on stage, and this is not one of those quarters where a company can simply beat the number, raise the guidance by a whisker and expect applause. Investors want proof now.
"They want to know whether the billions going into the compute buildout are building a durable earnings machine or just a shinier version of the same old capex furnace."
All three main indexes ended in the red on Wall Street on Friday, and Asia followed suit at the open on Monday, although some staged a recovery.
Seoul, seen by many as a barometer of the AI trade, sank more than one percent, while there were also losses in Tokyo, Singapore, Manila and Jakarta.
Tech firms were among the biggest losers, with SK hynix and Samsung down, along with Kioxia, Advantest and SoftBank in Japan.
However, Hong Kong, Shanghai, Sydney, Mumbai and Bangkok edged up.
Oil prices dropped more than one percent following Friday's surge of more than three percent fuelled by supply concerns amid the Middle East and Ukraine crises, with the northern hemisphere heading into winter.
Speculation has been brewing that Donald Trump will ramp up his war on Iran after next Tuesday's midterm elections, with some officials warning that the months leading up to the new Congress could be particularly dangerous.
The US president did little to allay those fears, telling Fox News on Sunday: "I have a decision to make: Do I finish it off, which would be very easy to do, or do I make a deal? That's all."
Additional forces, including a third aircraft carrier group, have been sent to the region, while US staffing levels have also been reduced.
Also in view this week are policy decisions by the Federal Reserve, European Central Bank and Bank of Japan.
While the Fed is expected to hold borrowing costs, traders will be keen to get an insight into its thinking following last month's hike and as inflation remains well above its two percent target.
"With market-based measures of inflation expectations well anchored and financial conditions tightening, Fed Chair (Kevin) Warsh can afford to remain patient," wrote Karsten Junius, chief economist at Bank J. Safra Sarasin.
"Still, demand remains too strong for inflation to return to two percent without further tightening. As a result, we continue to expect a gradual hiking cycle, with a 25-basis-point increase in December, followed by three quarterly hikes next year."
Tokyo - Nikkei 225: DOWN 0.8 percent at 62,189.65 (close)
Hong Kong - Hang Seng Index: UP 0.5 percent at 23,196.88
Shanghai - Composite: UP 0.2 percent at 3,697.52 (close)
West Texas Intermediate: DOWN 1.9 percent at $101.27 per barrel
Brent North Sea crude: DOWN 1.6 percent at $114.90 per barrel
Euro/dollar: UP at $1.1216 from $1.1194 on Friday
Pound/dollar: UP at $1.3374 from $1.3372
Dollar/yen: UP at 156.99 yen from 156.87 yen
Euro/pound: UP at 83.88 pence from 83.71 pence
New York - Dow: DOWN 1.2 percent at 52,215.16 (close)
London - FTSE 100: DOWN 0.3 percent at 10,690.36 (close)