Picture this: The S&P 500, that darling of Wall Street, stumbles through its roughest week in months.
Big red candles on the charts, investors hitting the sell button like it’s going out of style.
SoftBank in Asia takes a brutal beating, and suddenly everyone’s whispering about an AI bubble losing air faster than a punctured balloon. Coincidence? Or is something bigger pulling the strings?
The index kicked off the week strong but cratered starting around the 13th, with sharp drops that had traders scrambling. It bounced weakly off the 50-day moving average...a technical lifeline...but the damage was done.
Weekly close: down.
What sparked this panic? Tech giants, the supposed kings of tomorrow, are under fire. AI is undeniably the future, no debate there.
But are today’s sky-high valuations justified when most of these companies are funneling their profits straight to chipmakers like Nvidia? Profits projected years out feel like distant mirages, and the market might finally be calling the bluff.
Yet, zoom in closer, and another culprit emerges: interest rates. The 10-year Treasury yield started the week around 4.1% and ended punching up to 4.15%.
That’s not noise...that’s a signal. Rates don’t climb in a vacuum...they scream about shifting expectations.
But expectations of what, exactly? Growth? Inflation? Or something the Fed is desperately trying to engineer?
What if the Fed isn’t cutting rates to save the day, but talking tough to pop a bubble on purpose?
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