Stock market sell-off continues, as Google boss warns ‘no company immune’ if AI bubble bursts – business live

Global risk assets slid for a fourth day as investors fretted over lofty tech and AI valuations, a cooling chance of a December Fed rate cut and looming Nvidia earnings, with Asia-Pacific stocks down (MSCI ex-Japan -1.8%, KOSPI -3.5%, Nikkei >3%) and European indices slipping more than 1%; the sell-off has been amplified by concerns that large AI infrastructure outlays are being debt-funded—Amazon priced a $15bn bond—and comments from industry chiefs warning of irrational AI spending. The rout has hit crypto hard (roughly $1.2tn wiped from the market; bitcoin around $90k, down ~29% from its October peak), increased volatility ahead of key data and earnings, and coincides with idiosyncratic headlines that may affect specific sectors—Crest Nicholson issued a profit warning and cut jobs after weak summer sales, while the UK CMA opened probes into eight firms over online “drip pricing.”

Analysis

Global risk assets entered a fourth consecutive day of losses as investors reassessed lofty technology and AI valuations; MSCI’s Asia-Pacific ex-Japan index fell 1.8%, South Korea’s KOSPI dropped 3.5%, Hong Kong’s Hang Seng was down 1.9% and Japan’s Nikkei tumbled over 3%, while the S&P 500 closed at its lowest level in a month and major European indices slipped more than 1%. Crypto markets have been hit hard: CoinGecko data cited in the article shows roughly $1.2tn wiped from the sector in six weeks and bitcoin trading around $90k, roughly a 29% decline from the early-October record above $126k.

Concerns center on the sustainability of AI-driven spending as firms fund data‑centre capex with debt rather than free cash flow — Amazon raised $15bn in its first US-dollar bond sale in three years and peer issuers include Meta and Alphabet — and market pricing now assigns only a 41% chance of a December Fed rate cut (down from 43% on Friday), increasing pressure on non-yielding and high-multiple assets. Corporate idiosyncratic risks are also visible: Crest Nicholson issued a profit warning (adjusted PBT to be at or slightly below the £28–38m range), shares fell 13% and completion guidance sits at the low end (1,691 homes).

Near-term volatility is likely to persist ahead of critical catalysts highlighted in the piece — Nvidia earnings, US payrolls and further Fed or policymaker commentary — and Deutsche Bank/other indicators show eurozone volatility at levels not seen since the US regional bank sell-off in mid‑October, implying higher cross-asset risk and re‑pricing of tech/crypto exposure.

Key Decisions for Investors

• Trim or hedge high‑multiple AI and mega‑cap tech exposure ahead of Nvidia’s earnings and in light of increased debt-funded capex and negative sentiment, using options or reducing position size where conviction is weak
• Reduce outright crypto and speculative positions or implement strict downside protection given the ~29% pullback in bitcoin and the ~$1.2tn drawdown across the market, rebalance into cash or short-duration instruments
• Shift portfolio duration shorter and raise cash/liquidity modestly as markets price a lower probability of a December Fed cut (now ~41%), which makes non-yielding assets more vulnerable
• Monitor corporate credit flows and tech bond issuance (Amazon, Meta, Alphabet) and watch for widening spreads as an early signal of stress that would warrant further de‑risking
• Underweight or avoid UK housebuilders with near-term operational or policy risk (Crest Nicholson) until sales and guidance stabilise, and track CMA investigations for consumer-facing retailers that may face fines or reputational hits