Good morning and welcome back to the City AM liveblog.
The first round of 2026 tech wobbles kicked into action last week and revived fears of an AI bubble.
When Anthropic released a new AI tool designed to help in-house legal teams triage agreements and draft routine responses, the reaction trickled down through law firms straight into equity markets.
In London, Relx fell close to 11 per cent in a single session, wiping billions from its market value. Pearson dropped around four per cent. London Stock Exchange Group and Experian were down over seven per cent. And in Amsterdam, Wolters Kluwer slid almost nine per cent.
UBS downgraded the US tech sector, citing “pervasive uncertainty in the software industry”, and an expected moderation in infrastructure spend.
The bank claimed that Microsoft, Alphabet, Amazon, Meta and Oracle could all report capital expenditure of $700bn this year.
UBS expects capex growth to slow from current levels, “which could improve investor perceptions of those doing the spending, but is a potential negative for some companies in the enabling layer”.
Earnings season is still expected to show signs of success. According to Bloomberg Intelligence, S&P 500 earnings are expected to rise 8.4 per cent in the fourth quarter, marking a tenth consecutive quarter of year on year growth.
Whilst the FTSE 100 has managed to curb the dramatic losses seen on Wall Street due its weighting towards commodity-bases stocks, investor sentiment across the globe is still being hit.
Will 2026 be the year the AI bubble pops?
We’ll be bringing you the top news and analysis of the morning below.
And here’s a few of our top headlines from the weekend:
- Sarwar says Starmer welcome on campaign trail despite resignation call
- Greene King weighs job cuts as pub sector braces for cost squeeze
- Carmakers swallow $65bn EV hit as UK bucks slowdown
- Macclesfield FC: FA Cup heroes in talks with ‘huge’ foreign investors
- UK needs deeper integration with EU, says Starmer
- Brewdog calls time as advisers brought in to assess bidders
- Dubai-based ports boss leaves company after Epstein links revealed
