"Tune into your favorite financial television channel these days, and you're bound to get at least a handful of reasons to sell amid the recent pick-up in volatility. With Goldman Sachs (NYSE:GS) recently noting the possibility that most of the AI boom may already be priced into the stock market, there seems to be serious concern for the magnitude of returns moving forward, especially if there's more AI froth to take off the top before the year comes to a close."
"At the end of the day, you just had to know that an AI correction would happen at some point. And while this might not be the "big one" that sees the bubble pop in spectacular fashion, investors should stay the course, regardless of what anyone thinks markets are up for over the near term. It's impossible to know how markets will fare in the short term."
"At the end of the day, it's impossible to tell what stocks will do next week or next month. Perhaps the AI pullback winds down and the Nasdaq 100 leads the rebound by over 3% soon after? Or perhaps more pain could be in the cards, as the Santa Claus rally gets shot down? Either way, long-term investors shouldn't make too much of the near-term moves and should be on the lookout for stocks that have been overly punished."
Goldman Sachs noted the possibility that most of the AI boom may already be priced into the stock market, raising concern about the magnitude of future returns. The S&P 500 slipped more than 5% from its all-time high amid a recent pick-up in volatility, and an AI correction was inevitable. Short-term market direction is impossible to predict, with scenarios ranging from a Nasdaq 100-led rebound to further downside that could derail seasonal rallies. Long-term investors are advised to stay the course and look for high-quality stocks being sold off. Crypto markets have swung lower at early signs of broad market volatility.
Read at 24/7 Wall St.
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