In hindsight, the near-mania in which artificial intelligence plays are being chased after, driving broad swathes of the tech sector thus far this year, may lose more momentum eventually.
While some parts of generative AI are nice, investors realise they are not all monetisable. Nvidia, which led the charge, may not be the El Dorado that investors have been looking for, prompting quite a few to take some profit from what they’ve already gained.
Just when investors thought dark clouds seeded by the Fed would dissipate before the end of the year, Jerome Powell and his fellow governors continued to rain on the parade instead, as they made it clear rates would be held higher for longer, thereby watering down expectations of rates easing in 2024.
In response, global equity indices pulled back, especially the higher beta, more volatile growth tech stocks that have led the US markets this year. Equity engines turned negative, and even the initial pop enjoyed by Arm following its IPO has deflated a tad along with the broader market.
