Global stock markets tumbled this week as fears of an AI-driven correction rattled investors. Tech-heavy indices in the US, Asia, and Europe fell sharply following warnings from leading bank executives about overheating valuations.
In the US, the Nasdaq sank 2 %, while the S&P 500 declined more than 1 %. The day’s losses were led by AI-focused giants such as Nvidia, Meta, and Apple, which have dominated market gains over the past year.
Palantir Technologies suffered one of the steepest drops, down nearly 8 %, after news that Michael Burry had bet against it and Nvidia. The move triggered fresh concerns that speculative bets were unwinding across the AI sector.
Bank leaders, including those at Goldman Sachs and Morgan Stanley, echoed JPMorgan’s Jamie Dimon in warning that a correction could hit global markets within the next two years. Their comments intensified the risk-off sentiment.
Asian markets extended the decline, with Japan’s Nikkei and South Korea’s Kospi plunging over 5 %. European indices also weakened, with notable losses in London and Frankfurt.
Market analysts say that AI’s promise remains strong, but valuations may have run too far ahead of earnings. “We’re seeing early signs of exhaustion,” said one Deutsche Bank strategist, noting that AI returns remain concentrated in a few companies.
Bitcoin also fell sharply, briefly dipping below $100,000 as investors pulled out of speculative assets. The cryptocurrency’s decline capped a volatile month marked by profit-taking and heightened caution.