think companies are overinvesting<\/a> \u2014 the first time this has been a majority view in data going back to 2005.<\/p>\n\u201cConcerns are mounting over the sheer scale of AI-related capital expenditure\u00a0and whether monetisation and productivity gains can keep pace,\u201d said Daniel White, head of global equities at M&G, pointing to some estimates putting AI capex at about $7tn of cumulative spending by 2030.<\/p>\n
Daniel Pinto, vice-chair of JPMorgan Chase, flagged the risk of a possible market \u201ccorrection\u201d for some of the Big Tech companies ploughing vast sums into building AI data centres. <\/p>\n
\u201cTo justify these valuations, you are considering a level of productivity that will happen, but it may not happen as fast as the market is pricing,\u201d Pinto told a Bloomberg conference.<\/p>\n
Investors said Nvidia\u2019s earnings announcement, due on Wednesday, would be a crucial moment for markets. Peter Thiel\u2019s hedge fund, Thiel Macro, dropped its entire exposure to Nvidia in the third quarter, according to recent filings that gave a snapshot of holdings at the end of September.<\/p>\n
\u201cThe renewed sell-off in US tech stocks puts even more of a spotlight on the earnings report of AI bellwether Nvidia,\u201d said Jonas Goltermann, deputy chief markets economist at Capital Economics. \u201cIt will set the tone for the wider tech sector over the coming few weeks into the year-end.\u201d<\/p>\n
The Nasdaq has fallen more than 5 per cent in November, putting it on track for its first monthly drop since March. <\/p>\n
The Vix index, Wall Street\u2019s so-called fear gauge, jumped 11 per cent on Tuesday to a high of 25, above its long-term average.<\/p>\n
Some Asian markets opened lower on Wednesday with Korea\u2019s tech heavy Kospi down 0.4 per cent after falling 3.3 per cent a day earlier. Hong Kong\u2019s Hang Seng index opened up 0.1 per cent after falling 1.7 per cent on Tuesday.<\/p>\n
Futures trading in European indices pointed to a small rebound later after the Stoxx Europe 600 and Germany\u2019s Dax each closed about 1.8 per cent lower on Tuesday.<\/p>\n
Investors will also be watching the September US jobs report on Thursday, which was delayed by the longest shutdown of the federal government. <\/p>\n
The December Federal Reserve decision is now on a knife-edge, with traders divided 50-50 about whether the US central bank will cut or hold interest rates, compared with expectations a month ago that a cut was nearly assured. <\/p>\n
Higher rates tend to be negative for fast-growing companies. <\/p>\n
The market moves came as Home Depot warned economic uncertainty was weighing on its sales<\/a>. The retailer\u2019s shares slid 6 per cent. <\/p>\nGovernment bonds rallied as investors moved away from riskier assets. The yield on the 10-year US Treasury fell 0.02 percentage points to 4.12 per cent. Yields move inversely to prices.<\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the US equities myFT Digest — delivered directly to…\n","protected":false},"author":2,"featured_media":295038,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-295037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/295037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=295037"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/295037\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/295038"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=295037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=295037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=295037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}