AI Hype Persists but Market Divergence Intensifies as Foreign Capital Withdraws and Speculative Trading Heats Up
On October 13, the global market's attitude towards AI has not turned bearish, but rather is beginning to reassess the financial risks behind growth expectations. BlackRock has downgraded its rating on U.S. stocks from overweight to neutral and shifted to overweight on short-term U.S. Treasuries, reflecting that high interest rates and volatility in AI infrastructure investments have increased the risks of holding stocks. South Korea's Kospi plummeted over 6.5% during the day, with Samsung Electronics and SK Hynix declining for the fifth consecutive trading day, and foreign capital net sold over $6 billion in October. Even though semiconductor companies are still profitable, the concentration of holdings, the retreat of leveraged trading, and the gradual disappearance of buybacks may still amplify price corrections.
In contrast, U.S. stocks are showing another extreme: the nominal trading volume of individual stock options is about $700 billion daily, with more than half of the trades concentrated in contracts expiring within two weeks, and bullish sentiment has also risen to the highest point since July. This indicates that capital has not fully withdrawn from risk assets, but the shortened trading duration and concentrated positions make the market more sensitive to stock price fluctuations. When profit expectations are already high and prices rely on a few AI companies for support, any earnings report that falls short of expectations or a slowdown in investment returns could trigger more severe position adjustments.
The IMF warns that global economic growth is becoming concentrated in fewer economies, and the AI hardware supply chain and demand market are also highly concentrated, meaning that if technology investments cool down, the impact could simultaneously transmit to multiple markets. The Central Bank of Kazakhstan plans to reduce the proportion of gold in its foreign exchange reserves from about 78% to 75%, noting that high U.S. Treasury yields increase the attractiveness of dollar assets, which also reflects that institutions are reassessing asset allocations.
Next, the U.S. September CPI will be a key test for the market. If core inflation rises by 0.2% month-on-month, it may support the Federal Reserve in pausing interest rate hikes; if it rises to 0.3%, it could reignite tightening expectations. Overall CPI may still be pushed up by energy prices. What the market really needs to confirm is not just whether AI demand exists, but whether corporate profits can support current valuations, and whether capital is willing to continue bearing concentrated risks under high interest rates and inflation uncertainties.
-- Price
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