Wall Street is facing an unprecedented AI-DRIVEN BLOODBATH: US equities have ERASED -$5.7 trillion in market value since October 6th, as rising concerns over AI valuations, debt, and spending returns trigger a global market rout. The Nasdaq 100 suffered a -$2.3 trillion wipeout on Thursday alone, with 57% of its constituents trading at least -20% below their highs, exceeding the proportion seen when the index entered a bear market in March 2022. The turmoil intensified as potential restrictions on data-center construction added another threat to the AI investment cycle, putting the infrastructure required to support massive spending plans into question. Meanwhile, hedge funds, leveraged investors, retail traders and automated strategies amplified the selloff. Morgan Stanley data shows hedge funds have reduced gross leverage from their June peak by the largest amount in more than a decade. In effect, growth stocks underperformed value shares by -10 percentage points in October, their widest monthly gap since 2001. The AI trade is unraveling fast, and the damage may not be over.
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