Financial markets show signs of strain as the AI trade starts to crack

Bond selloffs, sliding currencies and growing doubts over AI returns are testing investors who leaned on one optimistic bet For a long stretch, artificial intelligence was the one story that kept investors cheerful through wars, swelling government debt and trade fights. That story is now developing hairline fractures. Reuters reported from London on Nov 3 that global financial markets are straining under all three pressures at once. The AI trade, long the market’s emotional support animal, is no longer immune. The warning signs are scattered across the map. Japanese and French bonds have sold off, and emerging-market currencies have plunged. Until recently, a multitrillion-dollar spending spree on AI had papered over much of that stress. Helped along by Washington’s light-touch approach to business, that spending pushed stock markets to record highs and lifted expectations for the global economy. The numbers behind the wobble October delivered the clearest evidence yet that patience is thinning. More than $2 trillion was erased from the Nasdaq 100 during the month as concerns about AI spending mounted. Intel took the hardest single hit. Its shares fell 28.6% on October 30 after th...