Not only in India but also in America, the festival of Diwali is celebrated with great fanfare. There is a reason for that too. There is also a presence of millions of Indians. But before Diwali there was tremendous excitement in the Indian stock market and 20 lakh crore rupees were earned in 7 trading days. American stocks suffered heavy losses on Friday. The special thing is that since reaching the peak on October 6, the total value of the American stock market has decreased by about 5.7 trillion dollars, i.e. 563 lakh crore rupees. According to experts, the excitement about artificial intelligence (AI) in the US stock market seems to be turning into concern. The US market has been hit hard by a heavy sell-off in the stocks of AI companies.
Nasdaq 100 down $2.3 trillion
The Nasdaq 100 index lost about $2.3 trillion on Thursday. Shares of 57 percent of the companies included in the index fell at least 20 percent from their highs. The decline was higher than the level recorded in March 2022 when the market entered a bear market. The major reasons for the market decline are high valuations of AI companies, mounting debt and uncertainty about getting adequate returns from the huge investments being made in AI. Investors fear that companies are spending trillions of dollars on AI infrastructure, but the returns are still unclear.
Political change increased anxiety
The victory of the Democrats in the US Congress has also increased the anxiety of investors. This has raised fears of possible restrictions on the construction and expansion of large data centers. Data centers are very important for the growth of the AI industry. During market declines, hedge funds, traders investing in loans and automated trading strategies added to the selling pressure. Ordinary retail investors also took the route of selling rather than buying shares during the downturn.
Now investors are waiting for profit
Experts believe that the pace of investment in the AI sector may be slower now than before. Investors are now focusing on the actual earnings and profits of the companies rather than the big promises of the companies. In such a situation, the performance of AI companies and the return on investment will play an important role in determining the direction of the American stock market in the future.
