The actions in the united states stock market They have been registering their fourth consecutive decline, due to investor concerns about excessive valuations in the shares of artificial intelligence companies.
The S&P500 and the Dow Jones Industrial Average were on a streak of three consecutive falls. The Dow Jones fell 2,260 points (4.7%) and the S&P 500 lost 231 points (-3.37%).
Meanwhile, European stocks plunged, with the German market hitting a near five-month low. Also, the MSCI global index fell 1.4%, while Europe’s STOXX 600 fell 1.92%. Emerging markets fell 1.80%. The Asia Pacific index sank 1.98%, while the Nikkei lost 3.22%.
In Peru, the Lima Stock Exchange, the general index (MSCI NUAM PERU GENERAL) fell 1.07% and caused stocks such as Volcan to fall by 4.56%.
The main reason for the decline is high valuations and increased debt to build data centers at artificial intelligence (AI) companies, which have led some investors to question the stock prices of these companies. A new survey revealed that 45% of fund managers consider an AI bubble to be the top “tail risk” to markets, amid growing concerns that companies are overspending, particularly on AI-related projects.
In an interview with the BBC, the CEO of Alphabet, Google’s parent company, Sundar Pichai, stated that all companies would be affected if an AI bubble burst and acknowledged that there is extreme optimism about these companies.
“While the AI investment boom has been an extraordinary time, there is some irrationality in the current boom,” Pichai said.
Asked whether Google would be immune to the bursting of a bubble, Pichai said the company can weather that scenario, but issued a warning: “I think no company will be immune, including ours.”
A basket of the “Magnificent Seven” fell 1.8%. Nvidia, the epicenter of AI enthusiasm, fell an additional 2.3% before releasing results after the close on Wednesday. Amazon and Microsoft fell more than 3% after a rating downgrade.
On Thursday, Wall Street will analyze the September jobs report to adjust expectations regarding the Fed’s upcoming decisions. It is the first major economic reading since the government shutdown delayed the release of official data. Traders have reduced their expectations of rate cuts: from complete conviction a month ago to a probability close to 50%.
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