LONDON, Nov 9 (Reuters) - World stocks nudged up from six-month lows on Monday, recovering slightly from last week's tech-led rout, though a sharp fall in AI bellwether Nvidia was already shaping up as a fresh test of sentiment.
Nvidia (NVDA.O), shares fell just over 4% in pre-market trading after an internal investigation into whether CEO Jensen Huang had been targeted by a foreign intelligence effort put his future at the AI chipmaker under scrutiny.
Oil prices, meanwhile, fell over 3% with President Donald Trump set to meet the prime minister of key mediator Qatar on Monday as efforts to end the Iran war gather pace following last week's midterm elections in the United States.
US stock futures recovered from early falls in a positive sign for the Wall Street open. European shares rallied (.STOXX), as bank stocks rose after Credit Agricole (CAGR.PA), proposed merging its Italian subsidiary with Banco BPM (BAMI.MI), opens new tab, a move that would create Italy's third-largest bank.
Global stocks have been under pressure in recent weeks with the AI trade crumbling amid rising interest rates, and sweeping Democratic wins in the US midterm elections deepening worries about increased regulation of AI and data centres.
Analysts said the outlook remained cautious with the selloff in Nvidia shares the latest test of investor sentiment.
"Markets are trying to figure out what this means for arguably the world's most important company right now," said Neil Wilson, UK investor strategist at Saxo.
"If Huang is forced to leave, what happens to Nvidia? As others have said, Huang is kind of irreplaceable for US leadership in AI."
MSCI's broadest index of Asia-Pacific shares outside Japan (.MISX00000PUS), rose 1.25% after sliding 4.6% last week. Taiwan's benchmark (.TWII), rose almost 5% after notching up its steepest weekly drop in two decades last week.
MSCI's World Stock Index (.MIWD00000PUS), rose 0.5%, holding above six-month lows hit last week.
Earnings reports due this week from tech companies including CoreWeave (CRWV.O), Applied Materials (AMAT.O), and Cisco Systems (CSCO.O), are set to put the profitability of AI ambitions to the test amid the massive costs of the build-out.
CoreWeave has become a barometer of investor anxiety over AI, and the cost of insuring its debt has spiked into distressed territory recently.
"The only fundamental this week that matters is price," said Chris Weston, head of research at brokerage Pepperstone.
"You could easily see a lot of people going, 'You know what, now's the time to buy — blood on the streets. It's not as bad as everyone thinks,'" he said. "It will be driven by flow, and fundamentals will mean very little."
OIL PRICES EASE
Brent crude fell 3% to $95 per barrel, while US West Texas Intermediate tumbled almost 3% to around $88.37.
This helped push down government borrowing costs in Europe and the United States. The 10-year US Treasury yield was a touch lower on the day at 4.84% .
Elevated oil prices sparked by the Iran war have weighed on economies across the globe this year.
China's factory-gate inflation, accelerated to its fastest pace in more than four years while consumer inflation cooled in October, reflecting persistent cost pressures from higher oil prices despite weak domestic demand.
Market attention turned to US CPI numbers on Tuesday, with bets for a December Federal Reserve rate hike rising after Friday's blowout jobs report showed US employers added 165,000 jobs last month.
Traders price in a roughly 80% chance of a quarter-point Fed rate hike in December. That pricing had briefly pulled back last week as the slide in tech shares raised economic growth worries.
The dollar was broadly soft after Friday's strong gains.
The dollar index , which tracks the greenback against a basket of currencies of other major trading partners, slipped 0.4% to 101.81, having notched up its biggest one-day gain since June on Friday.
The euro rose almost 0.5% to $1.11 , holding above its lowest level in roughly 1-1/2 years, which it hit last month.
In cryptocurrencies, bitcoin rose 0.7% to $74,559, after touching its lowest levels in over two months as investors fretted that a Democratic-controlled US Congress would toughen regulation on digital assets.
Reporting by Dhara Ranasinghe in London, Jiaxing Li in Hong Kong and Tom Westbrook in Sydney; Editing by Joe Bavier
