Sharp drops in technology stock prices have led to caution among brokers and investors, although they do not yet feel panic. Selling continued for a second day, with markets in Seoul and Tokyo about 5% lower than their recent highs, but they started to recover by the end of the day. In Europe, stocks rose slightly, and the Nasdaq gained 0.4% after a previous 2% drop. The stocks most impacted by the selloff were major players that had previously seen significant gains, like Nvidia, which has become the most valuable company globally.
The selloff seems to be driven by positioning within the market, with underperforming stocks experiencing the largest declines. There was no clear reason for the pullback, but it began after Palantir Technologies reported strong earnings that did not meet high investor expectations, leading to almost an 8% drop in its stock price. Experts believe a pause in buying could occur, suggesting that investors might shift their focus.
Nvidia’s shares fell nearly 4% on Wall Street, with significant drops in related companies across Asia. Analysts see this as a normal profit-taking behavior and not a sign of fear. Fund managers are cautious this time of year, not eager to exit the market completely but ready to take profits if necessary. Despite some month-end volatility, many believe that if the market stabilizes, investors will return.
Concerns over high interest rates, inflation, and a troubled global economy have lingered, raising questions about the sustainability of the AI stock boom. Recent comparisons show that even with a 2% drop in the Nasdaq, it has risen over 50% from earlier in the year. Some analysts believe this decline does not reflect a loss of interest in AI stocks, and current earnings reports from major firms have largely exceeded expectations, despite some inconsistencies.
Market leaders have expressed concerns about possible pullbacks, while some investors remain active, seeing opportunities amid the fluctuations.
With information from Reuters