A “long-delayed’ pair of economic data points are set to be released “in the coming days,” leaving market analysts on edge over what could become a “defining moment” in determining whether the United States is on the cusp of a market crash, NBC News reported Tuesday.
“Markets are bracing for a turbulent week as major economic data returns and investor anxiety grows around interest rates, tech earnings and cryptocurrency weakness,” said Lukman Otunuga, a senior market analyst at FXTM Global, an online trading broker, in a statement to NBC News.
Those data points are the jobs report – delayed in part due to the recent government shutdown – and an earnings report from Nvidia, the company at the heart of the artificial intelligence boom, investments of which now make up about a third of the value of the entire stock market. The jobs report is scheduled to be released Dec. 5, and Nvidia’s earning report, on Wednesday.
With the S&P 500 showing a 0.5% dip Tuesday, however, coupled with the American economy having shed jobs over recent months, as well as prominent billionaires selling off hundreds of millions of dollars’ worth of their stock in Nvidia amid concerns of an “AI bubble,” analysts are now bracing for the worst.
“Nvidia’s results could be a defining moment for the AI rally, while the delayed [jobs] report may reset expectations around the Fed’s next move,” Otunuga continued.
Concerns around there being a market bubble around AI have intensified in recent months, with AI companies having failed to demonstrate a clear path to profitability, despite record investments of hundreds of billions of dollars.
OpenAI CEO Sam Altman exacerbated those fears recently with remarks about the federal government becoming the “insurer of last resort,” which many interpreted as Altman arguing that taxpayers should bail out AI companies should they financially collapse. David Solomon, CEO for Goldman Sachs, has predicted that the market may fall by as much as 20% over the next two years.
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