An anonymous reader quotes a report from The Guardian: A massive technology sale shook world markets on Tuesday as attention turned away from developments in the US war with Iran and towards the future of the artificial intelligence companies and chip makers that have driven stock markets to record highs. heavy technology Nasdaq index closed 2.2% lower on Tuesday. He S&P 500 It was also down on Tuesday afternoon, falling 1.43%, while the Dow Jones was steady. All three major US indices have hit record highs this year, taking advantage of a flood of funding to support AI technology and infrastructure. The Nasdaq is up 10% so far this year, while the Dow Jones is up 6% so far this year, surpassing 51,000 points, and the S&P 500 is up 7.3%.
But some economists have warned that the influx of AI spending is a bubble reminiscent of the dot-com bubble that burst in the early 2000s. Seven tech companies account for 30% of the value of the S&P 500. The heavy reliance on a single industry and a few key companies has some investors wondering if it’s a question of when, rather than if, a burst will occur. Those concerns have been heightened by signals from the Federal Reserve last week that it might raise interest rates, and therefore the cost of borrowing, to address rising inflation. Alphabet fell 5% on Monday. SpaceX plummeted 16%. The sell-off also spread to Asia, where South Korea’s benchmark index fell 10%, while SK Hynix and Samsung Electronics each lost more than 12%, while Japan’s Nikkei 225 fell 3.5%.
