Asian stocks declined in early Monday trading after a volatile week, with investors bracing for megacap earnings that will test the artificial intelligence trade and key central bank decisions.

MSCI Inc.’s Asia Pacific equities gauge fell 0.2% ahead of this season’s busiest earnings week in Asia. US equity-index futures erased earlier gains and traded little changed.

The weak start followed declines on Wall Street on Friday as the AI trade came under intense pressure and a key US chip gauge posted its longest losing streak since November.

Read more: Nifty outlook bearish, but near-term recovery in sight: Analysts

SK Hynix shares edged higher after a report said the company plans to return about 80% of gains from the sale of a key part of its stake in Japan’s Kioxia to shareholders through a special dividend.

Providing some support, global crude oil benchmark Brent dropped around 1% from a six-month high to about $115.60 a barrel. US President Donald Trump said it’s “getting to be decision time” on whether to reach a deal with Tehran or resume attacks as threats from Iran and the Houthis against Americans in the Middle East mount.

Elsewhere, currency derivatives at CME exchange signaled investors are turning bearish on the Brazilian real after President Luiz Inácio Lula da Silva came from behind to win Brazil’s runoff election. The euro was quoted a touch higher after France dodged a downgrade at Moody’s Ratings.

Investors face another pivotal week after a volatile stretch for the AI trade, with earnings from Microsoft Corp., Alphabet Inc. and Amazon.com Inc. set to test confidence in the sector. Federal Reserve and Bank of Japan policy decisions will add to the week’s major catalysts as officials contend with stubborn inflation, higher energy costs and elevated bond yields globally.

“Global markets are preparing for another big week,” Nick Twidale, chief market analyst at AT Global Markets in Sydney, wrote in a note. The focus is “set to shift back towards central banks and interest rates after several weeks of geopolitical headlines dominating market moves.”

The Fed and its peers in the euro zone and Japan will probably keep rates steady in the coming week, opting to bide their time before potential further hikes. Three days of decisions starting on Wednesday in Washington are likely to affirm a hawkish stance balanced by a measured pace as policymakers confront inflation risks ranging from surging energy prices to the AI boom.

The Fed raised rates in September for the first time since 2023 and signaled another increase was likely this year. While US inflation has remained elevated, officials have indicated little urgency to move again this week, with economists and investors expecting the next increase in December.

In Asia, South Korean stocks will be in focus after Goldman Sachs Group Inc. strategists slashed their target for the Kospi Index by 25%, as concerns over the artificial intelligence trade intensify.

It’s also Asia’s busiest earnings week. About 550 of the roughly 1,200 companies in the MSCI Asia Pacific Index are due to report this week, according to data compiled by Bloomberg. That includes some of the biggest names in the AI boom, such as Korean memory giants SK Hynix Inc. and Samsung Electronics Co.

Geopolitical risks are also likely to remain elevated heading into next month. Trump has suggested US strikes on Iran could resume after the Nov. 3 midterm elections, while officials have warned the period between the vote and the new Congress taking office could be particularly dangerous.

The US is reducing diplomatic and military staffing in parts of the Middle East as threats from Iran and the Iran-backed Houthi militants in Yemen increase. The Houthis have repeatedly targeted Riyadh airport, which reopened Sunday for commercial flights.

“Several factors collide in the week ahead that could determine how the markets fare for the rest of 2026,” wrote Kyle Rodda, a senior analyst at Capital.com in Melbourne.