AI is no longer just an investment theme — it has become the entire global financial system. From chips to data centres, the AI ecosystem is driving record stock indices while starving other sectors of capital. The S&P 500 and Nasdaq hit new highs, but stripping out AI-related stocks reveals a 7% drop since August.
Oil prices hover near $100, bond yields exceed 5%, yet equity markets ignore these pressures. Three-quarters of S&P stocks fell last month — tech and energy infrastructure are doing all the work. Investors struggle to diversify as portfolios across asset classes become dangerously correlated.
Non-US capital floods into dollar assets, often unhedged, making the AI boom a de facto prop for the US dollar. US corporate earnings, especially in tech, justify valuations — but the system’s reliance on a single bet is unprecedented.
Source: Financial Times Markets · Summarized by HeadlinesBriefing