Crypto News Explorer

#USGDPUpdate
#USStocks have been eclipsed by market gains in the rest of the world in 2025, as worries about high valuations, a Chinese artificial intelligence breakthrough and #DonaldTrum ’s radical economic policies contributed to a rare year of underperformance for Wall Street.

The S&P 500 was up 17.4 per cent this year when US markets closed on Monday, undershooting the 29 per cent gain for the MSCI All Country World ex-US index by the widest margin since the global financial crisis in 2009.

Wall Street’s AI boom has powered a rebound from the sell-off sparked by Trump’s “liberation day” #Tariffs blitz in April.

But the lingering effects of the president’s trade war — as well as anxieties over sky-high US tech valuations — have led many investors to question the dominant position in global portfolios long enjoyed by US stocks.

#AsianStocks markets have been among the strongest performers, buoyed in part by Chinese start-up DeepSeek, which raised the prospect of serious competition to US AI with its large language model breakthrough in January.

The MSCI China is up 29 per cent, while Hong Kong’s Hang Seng has climbed almost 28 per cent.

US chipmaker Nvidia dropped 17 per cent on a single day following the release of a DeepSeek model whose performance rivalled those of US competitors but at a lower cost, prompting investors to question whether vast investment in AI infrastructure was necessary.

Although Nvidia stormed back to become the world’s first $5tn company in October, nagging doubts about AI valuations have hit the US market, fuelling a sharp November sell-off.

#investors ip in a volatile sell-off of perceived #AI losers”, choosing instead to stand on the sidelines until the full scale of the economic disruption becomes clearer.

The launch of a number of new AI tools in recent days has threatened to disrupt traditional business models in sectors including trucking, real estate, wealth management and advertising, with violent share price moves highlighting a market wracked with nerves about what comes next.

Despite companies rushing to reassure investors that AI will enhance their business and that plunging share prices are an overreaction, many portfolio managers are resisting the temptation to buy the dips that emerge.

“The world is changing very, very quickly . . . we wouldn’t have the conviction to try and bottom-fish,” s
🔥
EquitiesAdd to myFT
Investors reluctant to ‘buy the dip’ after AI scares
Sectors including wealth management and trucking have been hit with sudden share price declines

Some of the biggest software stocks have sold off significantly in recent weeks Michael Nagle/Bloomberg
Investors reluctant to ‘buy the dip’ after AI scares on #X (opens in a new window)
Investors reluctant to ‘buy the dip’ after AI scares on facebook (opens in a new window)
Investors reluctant to ‘buy the dip’ after AI scares on linkedin (opens in a new window)
Investors reluctant to ‘buy the dip’ after AI scares on whatsapp (opens in a new window)

Save
Emily Herbert in London

PublishedFEB 16 2026
Investors are shying away from buying the dip in a volatile sell-off of perceived “AI losers”, choosing instead to stand on the sidelines until the full scale of the #Economic disruption becomes clearer.

The launch of a number of new AI tools in recent days has threatened to disrupt traditional business models in sectors including trucking, real estate, wealth management and advertising, with violent share price moves highlighting a market wracked with nerves about what comes next.

Despite companies rushing to reassure investors that AI will enhance their business and that plunging share prices are an overreaction, many portfolio managers are resisting the temptation to buy the dips that emerge.

“The #world is changing very, very quickly . . . we wouldn’t have the conviction to try and bottom-fish,” said Robert Schramm-Fuchs, portfolio manager at Janus Henderson. 

“The AI models today are substantially more powerful than the ones from six or 12 months ago. What seems protected as a business model today might not be [in the future],” Schramm-Fuchs added. “It makes it even harder to buy the dip.” 

The Nasdaq Composite gave up 2.1 per cent this week and the broader S&P 500 shed 1.4 per cent. But the relatively measured index-level declines mask far more violent moves beneath the surface, with trucking giant CH Robinson falling 12 per cent and investment firm Charles Schwab down 11 per cent. Commercial real estate firm CBRE dropped 16 per cent and insurance broker Gallagher declined 13 per cent this week.

While billions of dollars were wiped from market caps, newly slashed valuations and share prices have largely failed to recover in subsequent sessions.

“Hesitation” had characterised markets this week, said Valérie Noël, head of trading at Syz Bank. “There’s been very little willingness to defend sharp moves the way you’d normally expect,” she said, and the market was “prioritising uncertainty management over dip-buying”.

While some of the biggest software stocks have sold off significantly in recent weeks, most investors are so far continuing to sell the sector rather than choosing to buy the dip, according to custodial markets data from State Street, which the firm uses to provide a snapshot of investor appetite.

“We see no sign of institutional investors trying to buy the dip in the [software] sector,” said Marija Veitmane, head of equities strategy at State Street, adding that money was instead going to the hardware end of the tech sector.

Goldman Sachs last week launched a new pair trade combining long positions on software “that AI cannot realistically displace because they require physical execution, regulatory entrenchment . . . or human accountability” with short bets against “software-tilted workflows that AI could increasingly automate or rebuild internally”.

“We expect [the former] to recover from the recent software sell-off while [the latter] lags behind,” the bank’s equity strategists said in a note on Thursday.

The logistics sector plunged in erratic trading on Thursday, when an announcement by a little-known $3mn karaoke-turned-freight company in Florida triggered one of the worst ever sell-offs for the trucking sector, wiping billions of dollars from the value of some of the industry’s most established names.

The tiny company at the heart of that sell-off — once the Singing Machine Co, now Algorhythm Holdings — released a white paper on Thursday that said its AI platform could scale freight volumes by up to 400 per cent without a corresponding increase in headcount.

The note ignited fears that new technology would destroy the market value of some of the industry’s leaders, sending logistics companies CH Robinson and Landstar both down by about 15 per cent in a single day.

Wealth management giants suffered similar moves earlier in the week, when AI tax planning firm Altruist released a suite of tools — sending FTSE 100 wealth manager St James’s Place 13 per cent lower — with insurance names similarly hit by a model from AI start-up Insurify. 

Recommended

Artificial intelligence
Wall Street hunts next casualty from AI threat to white-collar work
For some fund managers, however, the size of the stock falls looks like an overreaction.

“There is a lot of irrationality in markets at the moment,” said Alex Wright, a portfolio manager at Fidelity International. Wright said he had picked up some bargains in the recent sell-off because “a lot of stocks are not being priced appropriately”.

But others remain reluctant to jump back in.

“I think the [software] sell-off is totally logical,” said Charles Lemonides, the founder of hedge fund ValueWorks. “Valuations were absurd coming into this. Companies that were trading at 50 times earnings have come down to 30 times earnings because they will be hit by some AI disruption.”

Dan Hanbury, a portfolio manager at fund firm Ninety One, said that a lot of “great companies” had been swept up in the recent sell-offs.

“[But] I think the disruption is real, and you have to be very careful,” he added. “AI is going to get a lot more powerful — how can I guarantee that the moats around these companies are still going to be here? I’m not trying to trade that bounce.”