Revaluation of the assets of AI-related companies collapsed the global stock market by $6.4 trillion

The slowdown in the development of the US economy and the overvalued assets of AI-related companies led to the collapse of global stock exchanges. On Friday, stock indices in the US fell by 1.5-2.4%, although the economic data were not too negative. But Asian stocks started Monday with a sharp drop that shocked traders.

So, the Nikkei index in Tokyo fell by 12.4%, and the Kospi index in Seoul - by 9%, so immediately after the opening of the stock exchange in New York, the Nasdaq index collapsed by 6%. The Euro Stoxx 50 fell 1.45% to a 6.5-month low, while China's Shanghai Composite fell 1.54% to a near 6-month low.

Shares of technology companies Apple, Nvidia, Alphabet, Amazon and Tesla continued to fall in price and lost another 4% yesterday. Against this background, the S&P 500 index fell by 3% (-4.8% in two sessions), the Dow Jones Industrials by 2.6% (-4.1%), and the Nasdaq by 2.96% (-5, 44%).

The cryptocurrency market also struggled, with Bitcoin down more than 14% to a 5.5-month low yesterday.

Against the background of the collapse of stock markets, traders began to withdraw speculative capital in government bonds, and later they can transfer it to commodity markets. However, as a result of capital outflows, the yield on 10-year US Treasuries fell to a 14-month low, German 10-year bonds to a 7-month low, and crude oil prices to a 6-month low.

At the same time, Chicago Fed President Goolsby said that "the unemployment rate in July was worse than expected, but it does not look like a recession, as the US economy continues to grow steadily."

According to Bloomberg, the global stock market has lost $6.4 trillion in three weeks, as investors have realized that the ceiling of speculative growth has been reached, so it is worth locking in profits. In addition, it became known that the 93-year-old financier Warren Buffett sold his shares in technology companies as early as the 2nd quarter of 2024.

We will remind that the shares of Nvidia Corp., which produces AI chips, rose in price by 1,100% in two years and became overvalued.