Global Markets Plunge Amid CEOs' Warning of Potential Market Pullback
The recent selloff on Wall Street has left investors reeling after CEOs from major investment banks warned of a potential market pullback. The S&P 500 plummeted by 1.2%, while the Nasdaq Composite slid 2%, with tech stocks bearing the brunt of the losses.
Artificial intelligence and technology companies, such as Nvidia, took a hit after its CEO revealed that earnings from Palantir may have triggered jitters among traders. The company's shares tumbled nearly 8% despite beating Wall Street's expectations. Moreover, Michael Burry, an investor known for his bets against the housing market in 2008, disclosed large bets against Nvidia and Palantir.
In a statement at the Global Financial Leaders' Investment Summit, Goldman Sachs CEO David Solomon expressed concerns about the possibility of stocks experiencing significant losses, stating that "there are things that will change sentiment and will create drawdowns." Morgan Stanley's Ted Pick also warned that stocks could be poised for a pullback, noting that "10% to 15% drawdowns can happen without any macro cliff effect."
The concerns about stratospheric AI valuations have been building up all year. According to recent analysis from J.P. Morgan Asset Management, AI-related stocks account for 75% of S&P 500 returns since the launch of ChatGPT in November 2022. However, experts argue that a pullback is not always cause for concern.
"Corrections of 10-20% are also quite common," Jeff Buchbinder, chief market strategist at LPL Financial, wrote during a short sell-off in August 2024. "On average, the [S&P 500] experiences three drawdowns of between 5% and 10% each year."
The recent selloff on Wall Street has left investors reeling after CEOs from major investment banks warned of a potential market pullback. The S&P 500 plummeted by 1.2%, while the Nasdaq Composite slid 2%, with tech stocks bearing the brunt of the losses.
Artificial intelligence and technology companies, such as Nvidia, took a hit after its CEO revealed that earnings from Palantir may have triggered jitters among traders. The company's shares tumbled nearly 8% despite beating Wall Street's expectations. Moreover, Michael Burry, an investor known for his bets against the housing market in 2008, disclosed large bets against Nvidia and Palantir.
In a statement at the Global Financial Leaders' Investment Summit, Goldman Sachs CEO David Solomon expressed concerns about the possibility of stocks experiencing significant losses, stating that "there are things that will change sentiment and will create drawdowns." Morgan Stanley's Ted Pick also warned that stocks could be poised for a pullback, noting that "10% to 15% drawdowns can happen without any macro cliff effect."
The concerns about stratospheric AI valuations have been building up all year. According to recent analysis from J.P. Morgan Asset Management, AI-related stocks account for 75% of S&P 500 returns since the launch of ChatGPT in November 2022. However, experts argue that a pullback is not always cause for concern.
"Corrections of 10-20% are also quite common," Jeff Buchbinder, chief market strategist at LPL Financial, wrote during a short sell-off in August 2024. "On average, the [S&P 500] experiences three drawdowns of between 5% and 10% each year."
This is like the whole government trying to slow down the economy again by creating uncertainty... I mean, CEOs warning of a potential market pullback? It's just like how our politicians always say one thing but do another. They need to stop playing it coy with investors and be more transparent about what they know.
75% of S&P 500 returns since ChatGPT launched is huge, right? That's like how our politicians always promise the earth but deliver peanuts. They need to make sure they're not creating an artificial bubble that will burst and crash the market.
. But on the other hand, corrections of 10-20% aren't so bad either... I mean, experts say that's just normal 
. And think about it, we've had drawdowns before in history, right? 2008 housing market crash 
... didn't we learn from that? But at the same time, maybe this AI hype is due for a reset 
... idk, I'm all over the place on this one 
. I mean, AI stocks have been on fire since ChatGPT dropped in November last year 
. It's natural for prices to drop a bit after such an explosive run-up, but 8% for Nvidia? That's like, wow 
. I'm not a finance expert or anything, but if big CEOs are warning about a market pullback, it might be worth keeping an eye on things 
.
. He knows what he's talking about, right? 
On the other hand, J.P. Morgan says AI stocks account for 75% of S&P 500 returns since ChatGPT was launched 
. That's some crazy growth!
those CEOs must be feeling a lot of pressure, you know? but hey, at least they're being honest about their concerns... it's good to see some transparency, right? 
, like what's up with these valuations?! Companies like Nvidia are totally in the red, and it's just a coincidence that Palantir's earnings sent traders into a tizzy 
. One thing's for sure, this market is super volatile 
, and it's anyone's guess what happens next 
.
. what do you guys think?
I'm not surprised to see the market taking a hit. It's been building up for ages 
. 10-20% corrections are pretty normal, right? I mean, who doesn't love a good ol' fashioned market downturn? 
The fact that stocks have been making up so much of the S&P 500 returns since ChatGPT came out is just wild 
. It's not a cause for concern, imo 
. The experts are right, corrections are normal 
, they're just trying to cover their own behinds 
.
. I mean, we've seen plenty of 10-15% drawdowns happen without any major consequences 
. Still, it's hard not to feel a bit nervous when you're watching your investments tank 
. Guess we'll just have to wait and see how this all plays out 
.
.
. And let's not forget, corrections of 10-20% are actually pretty common 
. But let's not jump off the deep end just yet 
!
and then it was like "wait, avocados are still kinda expensive?" same thing with these AI stocks maybe they just need a correction to find their balance again?
. And those 10-15% drawdowns? Yeah, that sounds pretty normal to me... so yeah, maybe I'm just overreacting 
.
And speaking of relaxation, have you seen those new calming essential oils? I swear by lavender myself. Maybe we can plan a gardening day soon and discuss the market then? 
Anywayz back to the news, these market experts are saying a pullback isnt always bad 
but I'm like "yaaas bring it on" lol. I mean 10-15% drawdowns can happen and it's all part of the game