AI Mania Meets Market Reality: Tech Pullback Exposes Risks of Narrow Investor Focus

Stocks

Economic

Summary:

Despite strong earnings from AI giants like AMD and Palantir, U.S. tech stocks tumbled, revealing a growing disconnect between hype-fueled expectations and market behavior...

Tunnel Vision on AI Stocks Triggers Market Recalibration

The feverish rally surrounding artificial intelligence is showing its first signs of fatigue. On Tuesday, U.S. equity markets dropped sharply even as major tech firms reported strong quarterly results indicating a potential turning point where valuation concerns are beginning to outweigh the allure of AI-driven narratives.

Palantir, often seen as the market’s AI proxy, plunged nearly 8% despite delivering a blowout quarter, and AMD, after beating both revenue and income expectations, still declined in after-hours trading. Even established AI leaders like Nvidia and Amazon faced pullbacks. Oracle also dropped close to 4%. This divergence between fundamentals and price reaction highlights a causal disconnect: stellar earnings are no longer enough to sustain inflated share prices when investors begin reassessing risk and return.

AI Hype Meets Its Limit

The Nasdaq Composite fell over 2%, dragging the S&P 500 and Dow Jones lower, a sharp reversal from the rally that has lifted equity markets for most of 2025. AI optimism, once seen as the dominant driver of index performance, now appears to be morphing into a source of volatility as valuations stretch beyond sustainable levels.

The S&P 500’s forward price-to-earnings ratio remains above 23 near its highest point since the dot-com bubble prompting analysts to question how much further the market can climb without meaningful pullbacks. This valuation distortion, fueled largely by a handful of AI and tech stocks, reflects a market narrative driven more by momentum than macro fundamentals.

As Josh Brown of Ritholtz Wealth Management remarked, the market is “in a correction, even if the indexes haven’t caught up yet.” His statement underscores that beneath the surface of headline indices, capital is already flowing out of high-beta names and into safer ground a behavior that reflects rising investor caution.

Warnings From Within the System

Goldman Sachs and Morgan Stanley executives, who earlier warned of a 10–20% correction within the next two years, have added weight to this sentiment reset. While many still believe AI holds transformative potential, there’s a growing recognition that markets may have overestimated the near-term revenue and underestimated the scale of investment required.

The business model of AI especially infrastructure-heavy initiatives such as AI PCs, data centers, and chips requires vast capital expenditure. The mismatch between current profitability and future spending plans introduces a lagging effect on returns, which is now being priced in by markets.

Global AI Ambitions and Strategic Shifts

In parallel, global developments in AI infrastructure add complexity to the picture. Aramco’s CEO Amin Nasser told CNBC that Saudi Arabia plans to leverage its cheap energy and land availability to become a global AI data center hub. The kingdom's state oil giant is investing in Humain, an AI firm backed by Saudi Arabia’s Public Investment Fund.

This shift represents a correlated, though not directly causal, dynamic: while Western markets reassess AI valuations, nations like Saudi Arabia are doubling down on physical infrastructure as a long-term play. These diverging approaches may alter the geography of AI competitiveness in the next decade, with capital-intensive strategies potentially gaining traction in low-cost energy environments.

The Hype Cycle Faces a Test

The pullback in AI stocks, despite robust earnings, signals a critical juncture in the market narrative. While AI remains a transformational force, investor expectations may have run too far ahead of economic and financial realities. With earnings no longer cushioning price declines and capital flowing cautiously, the market appears to be entering a correction phase driven by valuation discipline rather than fear.

For investors, this is a pivotal moment to reallocate and reassess. Diversification beyond AI, renewed focus on balance sheet strength, and attention to macro trends especially interest rates and global energy dynamics are likely to shape the next chapter of equity market performance. The AI boom isn’t over, but it’s entering a more mature and more selective phase.

Source: CNBC

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Samantha Luan

Political

Economic

Zohran Mamdani was elected the 111th mayor of New York in a historic victory that will put an avowed democratic socialist in charge of the city that serves as the capital of global finance.

Mamdani, a Democrat, received 50.4% of the votes, while former Governor Andrew Cuomo, running on an independent line after his loss to Mamdani in the primary, garnered 41.3% with 75% of the vote counted, according to the Associated Press. Republican Curtis Sliwa got 7.5%.

When Mamdani is sworn in on Jan. 1, the 34-year-old state lawmaker from Queens will be the youngest person to hold the office in a century. He'll also be New York's first Muslim mayor and first person of South Asian descent to lead the city in its 400-year history. He'll replace first-term Mayor Eric Adams, who dropped out of the race amid low poll numbers and a series of scandals.

The election was one of the most competitive races the biggest US city had seen in more than a decade — a fact reflected in high levels of voter interest and turnout. More than 2 million people voted across New York City, the most since 1969, according to the New York City Board of Elections.

Mamdani broke through a crowded field of candidates in the June primary with a combination of charisma, social media savvy and messaging aimed at tackling New York City's affordability crisis, a strategy some political observers see as a model for national Democrats to emulate.

He campaigned on promises to freeze the rent on more than 1 million stabilized apartments, and fund free buses and universal child care with new taxes on corporations and high-earners. Median asking rents have surged to roughly $3,400 a month, and the city's housing vacancy rate reached 1.4% last year, the lowest in recorded history.

Mamdani also proposed ending mayoral control of the city's public schools and creating a new office within the New York Police Department to handle calls related to people suffering severe episodes of mental illness. He also wants to create five city-owned grocery stores to provide more affordable food options amid rising inflation.

His proposals and inexperience — he's sponsored only a handful of bills while serving three terms as a state assemblyman — unnerved business leaders, real estate groups and wealthy donors who poured money into PACs supporting Cuomo. (Former Mayor Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, has contributed to PACs supporting Cuomo).

Mamdani built a massive army of volunteers and launched a prodigious fundraising effort that was able to raise millions of dollars from thousands of individual small-dollar donors, in order to leverage the city's generous public matching funds program. The city matches donations from city residents to mayoral candidates with $8 for every $1 given, up to a maximum of $250.

Mamdani's campaign energized younger voters who turned out in much higher numbers than they had in previous elections. He also appealed to New York's growing Asian electorate, who have risen to become nearly 16% of the population over the past 20 years.

One of his first challenges as mayor will be managing the city's relationship with the White House. President Donald Trump has repeatedly lambasted Mamdani, calling him a "communist lunatic" and threatening to withhold funding from the city.

"It is my strong conviction that New York City will be a Complete and Total Economic and Social Disaster should Mamdani win," Trump posted Monday on Truth Social. "I don't want to send, as President, good money after bad."

Mamdani and Cuomo offered voters starkly different visions on taxes and policing in a race that at times mirrored the divisions roiling the Democratic Party nationally. The election also became a microcosm of New Yorkers' views on ongoing conflicts in the Middle East, with Cuomo pledging support for Israel as Mamdani criticized the Jewish state's military action against Hamas in Gaza and Iran while advocating for Palestinian rights.

The former governor, the candidate with the most experience working in government, pitched himself to voters as a seasoned moderate who could manage New York's problems — from crime in the subways to the universally acknowledged affordability crisis. He touted his achievements as governor, including the much-lauded renovation of LaGuardia Airport and the opening of the Second Avenue subway line.

Mamdani is the Ugandan-born son of Oscar-nominated filmmaker Mira Nair and Mahmood Mamdani, a Columbia University professor and scholar of colonialism. He moved to New York at age 7, attended Bronx High School of Science and Bowdoin College in Maine, and tried his hand at multiple careers, including as a rap artist, working on his mother's films, and as a foreclosure-prevention counselor at a nonprofit named Chhaya before turning toward politics.

He became a naturalized U.S. citizen in 2018, and he first won election to the Assembly in 2020, representing a district in western Queens.

Source: Bloomberg Europe

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Gerik

Stocks

Economic

AI Valuation Concerns Trigger Sell-Off Across Asia

Asian markets suffered a steep sell-off on Wednesday, mirroring the declines on Wall Street amid mounting concerns that artificial intelligence stock valuations have outpaced underlying fundamentals. The correction, sparked by a shift in sentiment following warnings from major U.S. financial institutions, is being viewed as the first serious test of the AI-led market rally that has dominated 2025.

Japan’s Nikkei 225 plunged 3.48%, falling below the key 50,000 mark for the first time in weeks, with the broader Topix down 2.27%. The biggest drag came from SoftBank Group, which lost nearly 12%, a reflection of its heavy exposure to high-growth, high-valuation tech assets. The impact was even more pronounced in South Korea, where the Kospi index dropped nearly 6%, led by semiconductor giants Samsung Electronics and SK Hynix, down more than 7% and 8% respectively. The tech-heavy Kosdaq declined 5.39%, underscoring the severity of the sentiment shift.

In China, the Hang Seng Index fell 1.36% and the CSI 300 lost 0.9%. The broader Asia-Pacific region also felt the pressure, with Australia’s ASX 200 sliding 0.77%, a relatively modest decline but still reflective of investor defensiveness.

Wall Street Correction Sends Shockwaves Globally

The overnight decline in U.S. equities set the stage for Asia’s retreat. The S&P 500 dropped 1.17% to 6,771.55, the Nasdaq Composite fell 2.04%, and the Dow Jones lost 0.53%. These moves followed sharp losses in AI-linked firms, notably Palantir, which plunged 8% despite beating earnings expectations and raising its guidance. The market reaction reveals a critical disconnect: investors appear increasingly unwilling to support even strong results if they believe valuations are unsustainable.

The correction is not isolated, it stems from a broader market context. The S&P 500’s forward price-to-earnings ratio has climbed above 23, nearing dot-com era extremes. This valuation level, according to FactSet data, is historically associated with overbought conditions. As Anthony Saglimbene of Ameriprise noted, “without a pullback, valuations are beginning to get really stretched.”

Strategists Warned; Markets Finally React

The sharp sell-off followed recent warnings from Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick, who both predicted a 10–20% correction over the next one to two years. Speaking at the Global Financial Leaders’ Summit in Hong Kong, the CEOs advised investors to remain invested but prepare for drawdowns as part of normal market cycles. Their remarks catalyzed a reversal in risk appetite, triggering the long-anticipated cooling of what has been dubbed the "everything rally."

Andrew Jackson, head of Japanese equity strategy at Ortus Advisors, framed the moment clearly: “Finally, a sell-off hits the tape,” attributing the timing to accumulated investor anxiety and the high-profile warnings from market leaders.

Causal Links and Structural Shifts in Sentiment

The relationship between AI exuberance and this market pullback is both causal and structural. AI stocks, by driving index valuations higher, created a situation where broader equity markets became vulnerable to any recalibration of expectations. With AI-led earnings growth increasingly priced in, the room for disappointment or even neutrality has shrunk. Even strong guidance from AI darlings like Palantir failed to prevent price collapses, suggesting that the market’s tolerance for lofty multiples is waning.

Asia’s reaction is not merely correlative. Given the region’s heavy concentration in semiconductors and tech platforms feeding the AI ecosystem, its exposure is direct.

A Healthy Correction or Broader Repricing Ahead?

While some analysts view this sell-off as a healthy pause, the depth and breadth of the correction indicate it may be the start of a more prolonged valuation adjustment. With interest rates remaining high and monetary policy paths uncertain, the market may struggle to justify previously inflated AI-driven multiples.

In the near term, volatility is likely to persist as investors reassess risk across sectors. As earnings season continues, the pressure will intensify on AI firms to deliver not just growth but profitability aligned with realistic expectations. Asia, given its tech dependence, will remain highly sensitive to these shifts making the next few weeks critical for global equity sentiment.

Source: CNBC

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Gerik

Political

Economic

A Constitutional Showdown Over Tariffs and Presidential Power

In a closely watched hearing, the U.S. Supreme Court is now confronting a case that may redefine the limits of executive authority in global economic governance. At the heart of the debate is whether President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs during his second term exceeds the powers granted to the presidency under the U.S. Constitution.

While the economic ramifications are enormous affecting over $140 billion in collected duties and the future of U.S. trade policy the case also challenges the structural balance between Congress and the executive. It poses the question: Who ultimately controls America’s taxing power and its influence over international commerce?

IEEPA: Emergency Law or Trade Weapon?

Trump’s administration has leveraged the IEEPA originally designed to counter national security threats such as terrorism and financial crime to justify tariffs on imports from China, India, Brazil, and even U.S. allies like Canada. These tariffs were frequently justified on unconventional grounds, such as the U.S. trade deficit or foreign media content, rather than imminent threats.

This approach has drawn legal scrutiny because the IEEPA, passed in 1977 to rein in unchecked presidential powers post-Watergate, does not explicitly authorize tariffs. Its omission of the word “duties” was no accident, legal scholars argue, but a deliberate move to preserve Congress's constitutional authority over taxation and trade.

The central constitutional issue is causal in nature: Trump’s use of emergency declarations to justify trade interventions rests on his ability to define emergencies unilaterally. If this view is upheld, future presidents could freely bypass legislative oversight to restructure global trade on perceived or politically convenient threats raising alarm over democratic accountability and separation of powers.

Economic and Market Ramifications: A Ruling With Billions at Stake

The ruling’s outcome will significantly affect U.S. importers, financial markets, and global supply chains. The U.S. is collecting $556 million per day from these IEEPA-based tariffs, representing 75% of added customs revenue in 2025. If the court deems these duties unconstitutional, the effective U.S. tariff rate would drop from 15.9% to 6.5%, Bloomberg Economics estimates.

This would reduce the drag on U.S. economic growth, but it would also introduce uncertainty about refund procedures. Wall Street firms have already begun purchasing claims tied to potential tariff reimbursements, betting that the court will overturn Trump’s actions and force the government to return billions to importers.

However, the refund process itself may prove chaotic. As highlighted by business owners like Jess Nepstad, even minor corrections take months to resolve under current Customs procedures. If the ruling mandates repayment across the board, administrative bottlenecks could overwhelm the federal system adding a layer of execution risk to the court’s decision.

Beyond Economics: The Legal Stakes Are Profound

The broader constitutional implications have drawn attention from former judges, senators, and scholars who warn against a precedent that could enable “emergency rule by decree.” A bipartisan legal brief argues that allowing unchecked use of IEEPA would erode congressional authority and upend the balance of U.S. governance.

Michael McConnell, a prominent conservative law professor and legal advisor to one of the plaintiffs, says the case is the most consequential since the 1952 ruling against President Truman’s wartime nationalization of the steel industry. That landmark decision affirmed that presidential powers in economic affairs must be clearly defined and limited.

The Trump administration counters that national security and foreign policy powers inherently reside with the executive, and that emergencies cannot be second-guessed by courts. Solicitor General D. John Sauer’s defense hinges on the idea that any declared foreign threat regardless of its nature grants the president broad, unreviewable authority under IEEPA.

A Defining Moment for Economic Governance and Executive Boundaries

The Supreme Court’s decision, expected in the coming months, will determine whether a modern U.S. president can unilaterally reshape global trade through emergency declarations. A ruling in Trump’s favor would establish expansive precedent for economic intervention without congressional input. A ruling against him would reassert legislative checks on economic authority and potentially force a rebalancing of tariff powers.

Whichever path the court chooses, the outcome will reverberate beyond legal circles reshaping U.S. global trade relationships, investor expectations, and the very boundaries of executive economic control. As markets and policymakers await the ruling, the case has become not just a battle over tariffs, but a referendum on the nature of democratic power in a globalized economy.

Source: Reuters

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Winkelmann

Forex

Political

Economic

Disagreement and dissent among the Federal Reserve's 19-strong monetary policymaking committee is deepening as the fog of economic uncertainty thickens, putting Chair Jerome Powell's consensus-building skills to the ultimate test.

The Fed's decision last week to cut interest rates was unexceptional, but the meeting was historic. The 10-2 vote to cut rates by a quarter of a percentage point was only the third time since 1990 that voting Fed members dissented in favor of both tighter and looser monetay policy. Trump-appointed governor Stephen Miran voted to cut by 50 basis points, while Kansas City Fed President Jeffrey Schmid voted for no change.

These fissures were underscored by Powell in his post-meeting press conference. He told reporters that officials hold "strongly differing views about how to proceed", meaning easing in December is not the "foregone conclusion" markets had been pricing in. Indeed, December's decision may boil down to a coin-flip between another 25-basis-point rate cut or no change.

This all comes at a challenging moment. Not only are investors navigating an economic data drought caused by the U.S. government shutdown – set to become the longest on record – but the indicators that are available show both a weakening labor market and sticky inflation. Meanwhile, the Fed is being heavily politicized, with the Trump administration attacking the central bank's independence as it also prepares to nominate Powell's successor next year.

It's a perfect storm that markets don't need, especially ones priced for perfection.

HAWKS VS DOVES

There is always going to be a wide range of views on a 19-member committee, with 12 voting members at any one time, including a mix of Fed governors and presidents of the 11 regional Fed banks.

Broadly speaking, the current division between the "doves" and the "hawks" appears loosely to have governors on one side and regional bank presidents on the other. Both sides contain centrists, but the governors are leaning in favor of easier policy, with the regional Fed presidents more apt to be cautious about further rate cuts.

Since the Fed's meeting last Wednesday, concerns about cutting rates have been voiced by Dallas Fed President Lorie Logan, Kansas City Fed President Jeffrey Schmid, Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee.

Meanwhile, Governors Miran, Christopher Waller, and Michelle Bowman have publicly supported the decision to cut last week and backed further easing. Waller and Bowman are on Treasury Secretary Scott Bessent's short list to replace Powell, whose term as Chair ends in May.

Thomson ReutersFed 'hawks vs doves' history - JP Morgan

'ROWDY AND DISORDERLY'

Powell's leadership and ability to pull together a consensus in this climate will be severely tested, as recent policy meetings attest. Governors Waller and Bowman dissented in favor of a rate cut in July, and then there was the historic two-way dissent last month.

It's true that non-voting regional Fed presidents are flexing their muscles, but it remains to be seen how effective that will ultimately be. As Tim Duy, chief U.S. economist at SGH Macro Advisors, points out, "the power flows from the Board".

"It's more difficult for Powell to create a consensus in this space," Duy says, adding that Powell has done a "great job" in doing just that over the years of his chairmanship.

If this policy polarization intensifies, many investors operating today will be in unfamiliar territory, having grown accustomed to well-telegraphed, consensus-driven Fed policy.

James Egelhof, chief U.S. economist at BNP Paribas, argues that the "very high level of consensus" investors are used to might prove "elusive" in the months ahead.

Egelhof still expects the Fed to deliver further rate cuts, including in December, but he also thinks we could see a "rowdy and disorderly" process leading to a "bumpier and more unpredictable" path than investors typically face.

"Polarization leads to uncertainty," he says.

Of course, greater policy uncertainty tends to fuel market volatility and increased risk aversion, which, in theory, should be reflected in rising risk premiums or widening spreads. That hasn't happened yet.

But if the emerging splits on the FOMC continue to widen, we could see just that. Don't say you weren't warned.

Source: TradingView

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Samantha Luan

Forex

Economic

The unemployment rate rose to 5.3% in the September quarter, as expected. Employment was flat and more people exited the labour force, but there was an encouraging lift in hours worked.

·Unemployment rate: 5.3% (prev: 5.2%, Westpac: 5.3%, RBNZ: 5.3%, mkt: 5.3%)

·Employment change: 0.0% (prev: -0.2%, Westpac: 0.0%, RBNZ: 0.0%, mkt: +0.1%)

·Participation rate: 70.3% (prev: 70.5%, Westpac: 70.4%, RBNZ: 70.4%, mkt: 70.5%)

·Labour costs (private sector): +0.4% (prev: +0.6%, Westpac: +0.5%, RBNZ: +0.4%, mkt: +0.4%)

The September quarter labour market surveys were generally as subdued as we were expecting. The unemployment rate ticked up from 5.2% to 5.3%, its highest level since 2016. There was a similar rise in the broader underutilisation measure from 12.8% to 12.9%.

The number of people employed was flat for the quarter, broadly matching the signal from the Monthly Employment Indicator (noting that the MEI has picked up in the last two months but tends to be overstated on its initial release). With the working-age population growing by 0.3% over the quarter, this was absorbed through a combination of higher unemployment and lower participation. The participation rate fell from 70.5% to 70.3% – a slightly larger fall than we had assumed – and appears to have been spread across age groups.

One unexpected but encouraging result was a 0.9% rise in hours worked in the Household Labour Force Survey – the first quarterly increase since December 2023. The HLFS measure can be volatile and not necessarily a good indicator for quarterly GDP, but in this case it was backed by a rise in the jobs and hours measures in the Quarterly Employment Survey as well. Average hours worked had fallen markedly over the last year or so, implying that employers were adjusting to the soft economy by reducing hours rather than laying off workers; the latest quarterly result suggests that this trend is reversing (or was perhaps overstated in the first place).

Given the degree of slack in the labour market, wage trends were unsurprisingly subdued. The Labour Cost Index for all sectors rose by 0.4% for the quarter, a little below our estimate but in line with market and RBNZ forecasts. Public sector wages rose 0.6% (driven more by local than central government), while private sector wages were up 0.4%.

The unadjusted analytical LCI, which includes pay increases that are related to higher productivity, rose by 0.7% for the quarter. The annual growth rate slowed from 3.6% to 3.4%, its lowest since June 2021. The distribution of pay increases also continued to soften: 44% of roles saw no increase in the past year, the highest share since June 2021. For those roles that did see pay rises, the average size of the increase is converging on the 2-3% range.

The September quarter results were almost entirely in line with the RBNZ's forecasts, offering little for markets to chew on ahead of the 26 November Monetary Policy Statement. There are some early signs of the economy stabilising, but the existing degree of spare capacity will give the RBNZ confidence that inflation will moderate back towards the 2% target midpoint next year. We continue to expect a 25bp cut in November.

Source: ACTIONFOREX

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Gerik

Cryptocurrency

Bitcoin Breaks Below Psychological Threshold as Market Sentiment Reverses

Bitcoin, the world’s largest cryptocurrency, slipped to $96,794 in early Asian trading on November 5, marking its first dip below the $100,000 threshold since June. This sharp decline represents a 7.4% loss in just 24 hours and a more than 20% drop from its historic peak reached a month earlier. The downturn underscores a significant shift in investor psychology, driven by macroeconomic stressors and waning momentum in both equity and crypto markets.

Recent macroeconomic data out of the United States has intensified fears of stagnation. October marked the eighth consecutive month of contraction in the U.S. manufacturing sector, while stock markets have shown little upward momentum, further eroding investor confidence.

Compounding this is the political uncertainty stemming from a U.S. government shutdown and growing skepticism around near-term monetary easing. Federal Reserve Chair Jerome Powell recently refrained from committing to a December rate cut, reinforcing market perceptions of prolonged restrictive policy. The causal relationship here is direct: Powell’s neutral tone dampened rate-cut expectations, strengthening the U.S. dollar and risk aversion, both of which weigh on crypto assets like Bitcoin.

October’s Flash Crash Continues to Reverberate

The current sell-off can be traced back to the abrupt correction on October 11, when Bitcoin crashed from $120,000 to just over $102,000 in a matter of hours. That incident, largely driven by massive liquidations in leveraged futures, reshaped trader behavior. Open interest in Bitcoin futures remains well below pre-crash levels, indicating persistent caution and reduced speculative appetite.

This psychological shock has had a lasting causal effect on market structure. As Chris Newhouse, Head of Research at Ergonia, explains, “The return to June lows reveals a fragile market still recovering from the liquidation cascade in October. That event has fundamentally altered how traders engage with downside momentum.”

Crypto ETFs and Retail Participation Retreat

Investor retreat is also evident in fund flows. Exchange-traded funds (ETFs) linked to Bitcoin and Ether have seen consistent outflows over the past month, a reversal from earlier this year when institutional inflows were a major driver of crypto gains. These withdrawals coincide with a broader cooling in retail activity, suggesting a cyclical shift rather than a temporary pause.

At the same time, Ether has dropped 15%, and most altcoins are trading lower, highlighting the systemic nature of the correction. Bitcoin’s muted year-to-date return now below 10% also underscores its weakening appeal as a portfolio hedge. In contrast, equity indices have significantly outperformed, with AI-driven tech stocks leading the way earlier this year, although even those have started to face valuation-driven pullbacks.

Convergence With Tech Equities Adds Pressure

The trajectory of Bitcoin has increasingly mirrored high-growth tech stocks such as Nvidia and Palantir, which are now facing downward pressure due to concerns over inflated valuations. This correlation, while not causative, reflects how speculative capital flows across risk assets tend to move in tandem, especially during sentiment reversals.

Bitcoin’s decline below $100,000 serves as a clear signal that the euphoria from earlier this year has faded. With macroeconomic risks mounting, policy direction unclear, and investor positioning turning more defensive, the crypto market appears to be entering a consolidation phase. Unless institutional inflows resume and macro headwinds ease, the current sentiment cycle suggests that any recovery will be gradual rather than immediate. In the meantime, Bitcoin’s inability to act as a risk hedge reinforces the need for strategic reassessment among long-term holders and short-term speculators alike.

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