Global Equity Volatility Insights: Record fragility reflects reflexive anxiety

Concerns over the AI trade and US tech weakness were marked by striking single stock moves last week, notably with GOOGL, INTC and NOW each experiencing their worst 1-day selloffs ever. Last week’s events were a continuation of the broader AI-era trend of rampant single stock fragility, with 2026 on track to be the second most fragile year for tech stocks in over 30 years, as earnings reactions grow larger and account for an increasing share of single stock realized vol. While EPS surprises have also risen, they haven’t kept pace with price reactions, suggesting fundamentals alone don’t explain near-record fragility. In our view, uncertainty around the unprecedented AI investment cycle is undermining fundamental conviction, while short investment horizons and year-end performance deadlines are fuelling anxiety and reflexive trading, amplifying price reactions to new information. SX5E weekly option activity has picked up ahead of US midterms to more than 2x its usual share of option vol