Global financial markets are under pressure after a wave of selling hit high-flying AI and tech stocks. Investors are increasingly worried that inflated valuations across the sector could signal the bursting of another market bubble.
The US markets led the retreat. The Nasdaq fell by around 2 % and the S&P 500 slipped more than 1 %, marking the largest one-day losses in weeks. Heavy declines in Nvidia, Meta, and Apple dragged down the broader indices.
The slide came after comments from top bank leaders who cautioned that markets may be overheating. JPMorgan’s CEO Jamie Dimon warned that the “froth” in AI valuations resembled the conditions seen before previous corrections.
Asia quickly followed the US decline. Japan’s Nikkei and South Korea’s Kospi both plunged more than 5 % from recent highs, ending weeks of optimism around tech-led growth. European stocks mirrored the sentiment, with major indices dropping across the board.
Analysts say much of the concern stems from the fact that AI investments have been funneled into a handful of mega-caps such as OpenAI, Nvidia and Microsoft. Despite record spending, the returns have yet to match expectations, fueling fears that investors may have overpaid for future growth.
Adding to the gloom, Bitcoin fell below the $100,000 threshold for the first time since summer. The cryptocurrency has been hit by a broad risk-off shift as traders look for safer ground.
“After months of euphoria, the AI trade is showing cracks,” said one strategist. “This may be the start of a long-awaited correction.”