IMF warns the risk of an AI-driven stock market correction is rising

The odds of an AI-fueled stock market crunch are climbing, and the International Monetary Fund is now saying so out loud. In its Global Financial Stability Report, released October 13, 2026, the IMF called an AI-driven correction in global equities a plausible outcome. What the IMF is worried about The fund points to three ingredients that could combine into a significant equity sell-off: high valuations, escalating leverage, and gains concentrated in a small group of US tech giants. AI-related stocks have accounted for 75% of S&P 500 returns since ChatGPT launched in November 2022. They have also delivered 80% of the index’s earnings growth over that period. The Magnificent Seven, made up of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, now represent over 35% of the S&P 500’s market capitalization. A decade ago, that figure was 12%. The debt underneath the boom Hyperscalers, the giant cloud and data-center operators powering AI, have been borrowing heavily to fund the buildout. These firms now account for 10% of global investment-grade bond issuance. In 2024, their share was less than 1%. The IMF also identified $300 billion in transactions between hyperscale...