AI profitability concerns drive tech stock sell-off
QQQ•Pendal said greater scrutiny of AI investment returns and cash generation, alongside weaker core businesses, is driving sharp technology stock declines. The US 10-year yield fell 9 basis points to 4.91% as investors sought Treasuries.
1. AI returns in focus
Pendal said investors are scrutinizing AI investment returns and cash generation as weaker core businesses trigger sharp declines in technology stocks.
2. Rates and inflation
Australian inflation points to a likely Reserve Bank of Australia rate increase to 4.85% on Melbourne Cup Day, with markets pricing an approximately 81% probability. Cooling housing prices and softer consumer spending could restrain activity despite persistent inflation pressures.
3. Other market pressures
The US 10-year yield fell 9 basis points to 4.91% as investors sought Treasuries amid the technology sell-off. Pendal said renewed conflict with Iran risks an energy shock that could reignite inflation concerns and pressure equity valuations.
