Global stock markets took a hit today, with investors growing wary about whether the big tech companies, often dubbed the “Magnificent 7,” are inflating a bubble around artificial intelligence (AI). Nasdaq 100 futures fell by 0.36% after a significant drop of 2.38% the previous day. Meanwhile, despite being flat, S&P 500 futures saw some volatility, and the VIX index jumped by 14%.
Bank of America captured the mood perfectly with the phrase, “The bubbly is on ice.”
Nvidia had a standout earnings report that surprised many, but even that couldn’t convince traders that the AI hype is healthy. After seeing a jump of 5%, Nvidia’s stock ultimately fell by 3.15%, a surprising turn of events. Evening trading showed even further declines, leading Deutsche Bank to describe the day as “truly remarkable” and unpredictable.
Tech stocks, in general, are struggling. For example, Palantir dropped by 5.85% yesterday and continued its downward trend today. Similarly, SoftBank Group saw an 11% decline in Japan.
Ed Yardeni, a respected voice in economic analysis, noted that uncertainty around AI spending is affecting the market. He explained that Nvidia’s strong report didn’t eliminate concerns about how AI infrastructure investments might impact the earnings of tech firms. Additionally, there were unsettling reports that significant players, including SoftBank and Peter Thiel’s firm, sold off all their Nvidia shares. This has raised more questions, especially with Michael Burry, known for his role in “The Big Short,” expressing doubts about how these AI companies report their financials.
The worries don’t stop with stocks. Concerns about AI’s reliability have been highlighted by a report from ING, where analyst Julian Geib pointed out that leading AI models can generate false claims up to 40% of the time. This increase in inaccuracies poses risks of misinformation, as newer models try to answer almost every query, sacrificing accuracy for fluency.
The cryptocurrency market is facing even harsher realities. Coinbase dropped by 7.44%, and Michael Saylor’s Strategy company lost 5%. Bitcoin, a digital asset once heralded as a reliable store of value, has plummeted by 24% this month. Currently priced at $82K, it is far off its high of $124K.
UBS’s Paul Donovan shared a stern assessment of the crypto situation, equating the recent decline in Bitcoin’s spending power to about 800% inflation. He warned that when demand for crypto tanks, reducing the supply is not feasible, which could lead to regular risks of hyperinflation.
Here’s how major markets are looking ahead of trading in New York:
– S&P 500 futures were flat, having closed down 1.56% in the last session.
– STOXX Europe 600 fell by 0.8%.
– The U.K.’s FTSE 100 dropped by 0.49%.
– Japan’s Nikkei 225 slid down by 2.4%.
– China’s CSI 300 was down 2.44%.
– South Korea’s KOSPI sank by 3.79%.
– India’s NIFTY 50 fell by 0.52%.
– Bitcoin lingered at $82K.
The overall atmosphere is uneasy, and many are keeping a close eye on how these trends unfold. With significant experts weighing in on the current economic landscape, it’s clear that both tech and crypto sectors face tough challenges ahead.
Source link
Bitcoin,Cryptocurrency,Markets,Nvidia,Stock,Tech
