What changed on October 29? There was a Federal Reserve meeting that day, and the US central bank cut interest rates as expected, but signalled a cut at the next meeting was unlikely, which took some of the air out of rate-sensitive tech stocks’ sails. Third-quarter corporate earnings reports that were rolling in around that time were generally strong and anticipation of economic expansion in 2026 was taking hold — supporting economically sensitive cyclical value stocks.
Most importantly, though, October 29 was when investor enthusiasm for heavy investment in AI peaked and began to fall. Meta reported earnings that day, and announced a big increase in spending. Investors hated it and the stock tumbled. In the six weeks since, Nvidia, Microsoft, Oracle and Broadcom have fallen significantly. The loss of speculative appetite has extended beyond AI. High-flyers such as Coinbase and Robinhood have been hit hard too. This is a very different world than the one we were in just a few months ago.
Chart of the Week: So the last shall be first
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