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Wall Street Futures Slide Amid AI Bubble Concerns

  US stock futures retreated on Tuesday as mounting fears of an AI-driven market bubble weighed heavily on investor sentiment. The Dow Jones Industrial Average futures fell 0.7% , marking the worst three-day run for the blue-chip index since April. The Nasdaq 100 slipped 0.8% , while the S&P 500 dropped 0.6% , extending losses from a bruising session earlier this week. The pullback comes ahead of a pivotal Nvidia earnings report , which investors see as a litmus test for the sustainability of the AI boom. Concerns about inflated valuations in the sector have grown, particularly as chipmakers and tech giants face scrutiny over their aggressive expansion into AI infrastructure. Adding to the turbulence, Bitcoin briefly dipped below $90,000 , erasing all of its gains for the year and deepening a global sell-off in cryptocurrencies. The decline rattled Asian markets, with Japanese stocks suffering their steepest loss since April. Meanwhile, 10-year Treasury yields fell , reflec...
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US Inflation Surges in January, Raising Concerns for Fed and Markets

 

The US consumer price index (CPI) rose 0.5% in January from the previous month, exceeding economists’ expectations of a 0.2% increase, according to data released on Tuesday. The annual inflation rate jumped to 3.1%, the highest level since March 2021, and above the Federal Reserve’s 2% target.

The surge in inflation was driven by higher costs of energy, food, shelter, and transportation, reflecting the impact of supply chain disruptions, labor shortages, and rising demand amid the economic recovery from the pandemic. Core inflation, which excludes volatile food and energy prices, also rose 0.4% in January, the largest monthly gain since July 2021.

The higher-than-expected inflation report rattled the financial markets, as investors feared that the Fed might have to tighten its monetary policy sooner than anticipated to prevent the economy from overheating. US stock futures fell after the release of the data, while the yield on the 10-year Treasury note rose to 2.09%, the highest level since January 2020.

The Fed has maintained that the current inflation spike is transitory and largely reflects the base effects of low prices a year ago, as well as the temporary factors related to the reopening of the economy. The central bank has signaled that it will keep its benchmark interest rate near zero and continue its bond-buying program until the labor market and inflation reach its goals.

However, some analysts and policymakers have warned that the inflation pressures could persist and become more widespread, posing a threat to the economic outlook and the Fed’s credibility. They have urged the Fed to act more aggressively to rein in inflation and prevent a loss of confidence in its ability to maintain price stability.

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