WASHINGTON, D.C. — Global equity markets held steady on Monday after a volatile week in which technology‑heavy indices slipped into bear‑market territory, as investors weighed the impact of a broad AI‑related sell‑off against a still‑tight Federal Reserve policy stance.

The S&P 500 closed at 4,527, down 2.1% from its March peak, while the Nasdaq Composite fell 2.4% to 13,842. The Dow Jones Industrial Average slipped 1.8% to 34,981. In Europe, the Euro Stoxx 50 lost 1.9%, and Asian markets posted mixed results, with Japan’s Nikkei down 1.3% and Hong Kong’s Hang Seng up 0.6%.

KEY POINTThe S&P 500 closed at 4,527, down 2.

“The AI rout was a catalyst, not the sole driver; investors are still digesting higher‑for‑longer interest rates,” said Laura Chen, senior market analyst at Global Insights. “When you combine a 5.25‑5.50% federal funds target range with lingering inflation at 3.2% year‑over‑year, the risk appetite narrows.”

Federal Reserve Chair Jerome Powell reiterated that the central bank will maintain its current policy stance until inflation consistently falls toward the 2% goal. The Fed’s latest minutes showed a 75% likelihood of keeping rates unchanged through the next meeting, reinforcing the backdrop of monetary tightness that continues to pressure growth‑sensitive sectors.

For investors, the mixed signals translate into a cautious approach to risk‑on assets. Portfolio managers are rotating from high‑beta tech stocks toward dividend‑yielding utilities and consumer staples, while some hedge funds are positioning for a potential rebound if AI‑related earnings reports exceed expectations.

Key Takeaways

• Major U.S. indices remain in bear market territory after AI‑driven declines of 2%‑2.5%.
• Fed policy rates sit at 5.25‑5.50%; inflation easing to 3.2% keeps monetary tightening in focus.
• Investors are shifting toward defensive sectors and monitoring upcoming AI earnings for volatility cues.

While the market steadied, analysts caution that further volatility is likely as earnings season approaches and central‑bank communications remain the primary driver of investor sentiment.