Wall Street takes off after a wave of emergence with the support of artificial intelligence transactions

Wall Street equity indices fell after a series of record heights caused calls for breathing amid signs of fatigue in investors, while US bonds rose after an auction of $ 58 billion in Treasury attracted a strong demand. The wave of optimism fueled by artificial intelligence has changed in the fear that the rise has been redone, to a $ 16 trillion jump in the market value of the S&P 500 index since the lowest levels in April. Shares of major technology companies contributed to subtracting the index, on the back of a report indicating that Oracle’s cloud profit margins were lower than many estimates. Tesla shares have also dropped by more than 4% after introducing new versions of its best-selling models, at prices of less than $ 40,000. Excessive optimism among investors in recent months has increased investor optimism to an excessive extent as it is more engaged in pursuing profits than to worry about potential risks, such as the US government’s downtime or exaggerated valuations. Goldman Sachs said the customer sentiment has reached its highest levels since December, while the Barclays Investor Sentiment Index has shown that it approaches a level that indicates ‘excessive optimism’, while a similar index of ‘Bloomberg Intelligence’ returned to what analysts described as ‘the zone of excessive optimism’. “It would not be surprising to see a period of consolidation after this strong rally, but we believe that the fixed economic fundamentals still support the continuation of this upward trend,” said Urbs Global Wealth Management UBS Global Wealth Management. The S&P 500 index closed at 6.715 points. Oracle shares fell 2.5%, while Dell Technologies shares increased by 3.5% after the company increased its estimates, supported by strong demand for artificial intelligence. The return on ten years of US Treasury bonds fell by two basis points to 4.13%, while the dollar rose. Explanations from the Federal Reserve and the analysis of the market traders also responded to statements by the Federal Reserve officials, as Governor Stephen Meiran said his expectations of a limited impact of tariffs on inflation meant that the bank could continue to facilitate monetary policy. On the other hand, Neel Kashkari, president of Minneapolis Federal Reserve Bank, warned that any sharp reduction in interest rates could revive inflationary pressure. Chris Montagu of Citigroup said: “The profit-taking risks rose rapidly over the markets, especially in the Nasdaq, which could hinder any further increase.” Nevertheless, Craig Johnson of Piper Sandler expressed his optimism and pointed out “favorable macro economic winds that push the market higher, but added that” there are minor signs of varying momentum that require caution, especially with stocks that have been exaggerated over the past few weeks. ” “A short consolidation phase or minor correction would be welcome to provide better risk and return opportunities,” he added. Mark Newton of Fund Street Global Advisors said: “About conditions are not a good reason to avoid US shares as they can continue for a long time and are not necessarily a negative indication, but it is important to pay attention and not fall into the trap of excessive reassurance.” High values ​​and fear of an AI bubble for Callie Cox of Ritholtz Wealth Management, it is normal for ‘valuations to move higher, especially to sharp sales waves such as the one we saw in April,’ added: ‘Now we need earnings and economic data to keep up with this rise.’ She noted that “price-to-earnings approaching the extreme levels should encourage investors to rebalance their portfolios,” and adds: “There is still a lot of hidden value or protection against selling, which can protect investors from possible disappointment in the artificial intelligence sector.” Some Wall Street analysts point out that the double-digit increase in the shares of several major technology companies over a short period may indicate that valuations from the fundamentals have been disconnected, and that investors buy for further profits. These movements come amid growing fear of a bubble that forms around artificial intelligence, with large companies undertaking to pump billions of dollars in transactions with a group of companies offering infrastructure for this sector. As money continues to flow, there is an increasing concern that this trend ends in an explosion similar to what happened 25 years ago after the Dot-com bubble. Louis Navelier of Navelier & Associates said that warnings about a repetition of the dot-com bubble scenario ‘are constantly repeated, adding that’ the big difference this time is that the players today are big companies with big budgets and existing cash flow. ‘ He added: “If the achievement of profits lasts longer than expected, some suppliers of devices may suffer operating losses. The market, which is charged by companies that bet entirely on artificial intelligence, will be severely affected in the short term if expectations for the profitability of this sector drop.” However, relief in the mortgage market said investors should not be concerned about a market bubble: “As long as the analyst community continues to increase earnings estimates, and the Federal Reserve is still lowering the most important interest rates, we can invest in blue-chip shares with confidence.” In a related context, JP Morgan Chase CEO Jamie Dimon said that the bank spent two billion dollars developing artificial intelligence technologies annually, saving about the same amount thanks to these investments. He added in an interview with Bloomberg TV: “We know that the cost saving will reach billions of dollars, and I believe that what we see now is just the tip of the iceberg,” emphasizes his confidence in the enormous potential of this technology. “There is a lot of talk about overalluations in the stock market and the need for a logical correction downward,” says Ian Lyngen and Phil Hartman of BMO Capital Markets. “The issue is not whether prices have risen too much, but rather how the financial system will respond in the event of a sharp correction.” They pointed out that “the price movements were not a major sale on Tuesday, but rather a decline in the technological sector after concerns related to now profit margins in woolly cinemen services related to artificial intelligence,” and they added: “We are not experts in technology and will leave the assessment of these concerns to the specialists. Our only conclusion is that the Bonds market is comfortable. ‘