Despite encouraging US economic indicators such as stronger-than-expected hiring in September and a pickup in existing home sales, the market reaction suggests underlying investor anxiety. This is partly due to ongoing concerns about an AI-driven stock bubble, despite CEO Jensen Huang’s dismissal of those fears and Nvidia’s robust demand for AI chips. Analysts with Oxford Economics view the recent tech selloff as a healthy correction rather than a sign of a broader downturn in AI investment.
International markets also showed weakness, with Japan’s Nikkei 225 and South Korea’s Kospi both down sharply, reflecting global investor caution. Crypto markets followed suit, with Bitcoin falling below $90,000 to its lowest since April, weighed down by AI valuation concerns.
Investor jitters also persist around the Federal Reserve’s next moves on interest rates, as delayed inflation data due to the recent US government shutdown keeps market participants uncertain about the pace of future rate cuts. The S&P 500 index is on course to have its worst month since March after falling more than 4% so far in November.
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