Investors have long ignored the potential for pain in the actual economy from the trade war. But with valuations stretched, reality could get in the way.
A fascinating pressure test is about to get under way for equity markets. It boils down to this: the real economy versus the artificial intelligence boom.
Last Wednesday and Thursday night, it was all about AI, as Microsoft and Meta Platforms (owner of Facebook and Instagram) delivered impressive June quarter earnings that suggested the technology sector’s staggering investment in AI infrastructure – about $US350 billion this year between those two, Alphabet and Amazon, and probably at least $US400 billion next year – was getting early returns.
Source: https://www.afr.com/chanticleer/beware-air-pocket-in-markets-as-real-world-problems-overshadow-ai-boom-20250804-p5mk1j