Investors are retreating from crowded artificial intelligence positions due to stretched market valuations, mounting debt burdens, and unclear financial returns on infrastructure spending. A single-day plunge wiped $2.3 trillion from the Nasdaq 100 on Thursday, leaving 57% of its member companies down at least 20% from prior peaks. The selloff deepened as hedge funds reduced their leverage by the largest margin seen in over a decade, while rotating into utilities and consumer staples failed to shield investor portfolios.
Key points
Shifting political control in Congress introduces new legislative roadblocks that could d…: Shifting political control in Congress introduces new legislative roadblocks that could directly slow down data-center construction.
Strong employment figures have prompted market participants to brace for an additional Fe…: Strong employment figures have prompted market participants to brace for an additional Federal Reserve rate increase this December.
Plunging crude oil prices linked to hopes of an easing Iran conflict may eventually provi…: Plunging crude oil prices linked to hopes of an easing Iran conflict may eventually provide some relief to inflation pressures.
Sources checked by our analysis pipeline: 1
The worries have been on display all year: stretched valuations, mounting debt and doubts about the payoff from trillions of dollars in AI spending. But the Democratic sweep of Congress has added a new political threat, raising the prospect of restrictions on the vast data-center buildout underpinning the boom.
The response has been extraordinary even by the standards of a volatile year. Wednesday brought a sharp – and unexpected — rally in US stocks. Thursday saw a $2.3 trillion wipeout in the Nasdaq 100. At the close, 57% of its constituents had fallen at least 20% from their highs, a greater proportion than when the index itself entered a bear market in March 2022. By Friday, chipmakers had rebounded even as strong jobs data reinforced bets on another Federal Reserve interest-rate increase.
The reversals offer a glimpse of how disorderly the next phase of the AI cycle could become — with little help from the usual rescuers. The Fed remains focused on inflation, with traders betting on another interest-rate increase in December. Weakened by the midterm election, President Donald Trump…
A confluence of global relief and domestic tailwinds sparked an aggressive rebound across Indian equities, fueled by falling crude prices and softer U.S. bond yields. Overseas institutional buyers returned with massive inflows, positioning the domestic market as an insulated destination amid broader worldwide tech-sector volatility. This sharp rally added roughly ₹28 lakh crore to investor wealth as major benchmark indices reclaimed key historical milestones.
Festive shopping during Diwali celebrations across India spurred heightened consumer interest in precious metals as buyers weighed options between coins, bars, and jewellery. While some prominent retail chains posted marginal price upticks, others kept their standard rates steady across major metropolitan markets. Consumers are closely tracking these variations to align holiday purchases with indicative bullion rates.
Record earnings from the copper division and operational recovery at Novelis propelled Hindalco Industries to strong second-quarter financial growth. While elevated domestic coal prices threaten to temporarily increase domestic aluminium production costs in the coming quarter, broader market sentiment remains reinforced by robust earnings diversification away from London Metal Exchange swings.