Pressure is rising on financial markets more broadly as investors reassess the outlook for economic growth at a time when tech behemoths continue to spend heavily on AI. Microsoft Corp and Nvidia are committing to invest up to a combined $15 billion in Anthropic PBC, in a move that ties the AI developer closer to two of the biggest backers of its rival OpenAI.
Also Read: Nvidia sees yet another high-profile exit after SoftBank as AI bubble concerns mountValuations in the booming AI industry are due for a reassessment, according to JPMorgan Chase & Co. Vice Chairman Daniel Pinto, who warned that any decline would reverberate across the stock market.“There is probably a correction there,” Pinto said at the Bloomberg Africa Business Summit in Johannesburg on Tuesday. “That correction will also create a correction in the rest of the segment, the S&P and in the industry.
Investors’ cash positions dropped below a critical threshold in a monthly Bank of America Corp. survey, triggering a so-called sell signal for equities. With investor exposure to equities still the highest since February in the BofA survey, strategist Michael Hartnett said the market would “correct further” without a rate reduction next month. Positioning is now “a headwind, not a tailwind for risk assets,” he noted.
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The S&P 500 hovered near 6,600. A gauge of tech megacaps lost 2.5%. Bitcoin briefly dropped below $90,000 before bouncing. The yield on 10-year Treasuries slid five basis points to 4.09%. The dollar wavered.
