Asian chipmakers tumble in global stock sell-off amid worries over AI bubble – business live

Deutsche Bank: Growing chorus of ‘whether we might be on verge of equity correction;’ China ends tariffs on US imports including farm goods but soy bean levies remainDavid Morrison, senior market analyst at Trade Nation, took a look at recent AI investments yesterday.It looks as if traders are finally booking some profits following the strong gains seen since late April as equities bounced back following the ‘Trump Tariff Temper Tantrum’. All the major US stock indices had been marking time over the past week or so, trading just south of all-time highs hit in late October.Once again, [on Monday] news of a large investment in artificial general intelligence lifted tech. OpenAI, the privately owned owner of ChatGPT, announced a $38bn investment in Amazon Web Services, giving it access to Nvidia’s graphic processing units for seven years.The last 24 hours have brought a clear risk-off move, as concerns over lofty tech valuations have hit investor sentiment. Markets compounded these losses in the early hours of Asian trading but have been rallying back in the couple of hours prior to going to print with US futures clawing back towards flat with the Kospi rallying back a couple of percentage points from early -5% plus losses.Whilst the moves were only one day’s selloff, the market narrative saw a discernible shift, with a growing chorus discussing whether we might be on the verge of an equity correction. That speculation has gathered pace over the last month in particular, mainly because the Magnificent 7 has diverged from the rest of the S&P 500, which has revived questions about how concentrated this equity market now is. Indeed, whilst the Mag 7 have been advancing in recent weeks, the equal-weighted S&P 500 actually fell in October for the first time in 6 months.Yesterday’s decline for Palantir (-7.94%) was seen as emblematic of this shift, particularly given they’d actually raised their revenue outlook the previous day. But given their share price had quadrupled in the last year, that’s set the bar incredibly high for any earnings releases. In fact, the Magnificent 7 (-2.28%) led the declines yesterday, with Nvidia itself down by a larger -3.96% as some of those top-performing stocks came under scrutiny. Continue reading...

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