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Instant Reaction: Wall Street Gets AI Wake-Up Call with Deep Tech Selloff · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio, news.
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  Speaker 2: This is a breaking news update from Bloomberg.
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  Speaker 3: Instant reaction and analysis from our 3,000 journalists and analysts
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  Speaker 3: around the world. Taking a look at the equity markets,
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  Speaker 3: the S & P 500 fell 1.8%, the Nasdaq Composite
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  Speaker 3: down 2.9%, the Dow down a little over 1%. Christina Kino,
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  Speaker 3: Bloomberg News Markets Live blog, Managing Editor.
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  Speaker 2: How do you explain today's sell-off?
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  Speaker 1: I mean, honestly, Tim, the explanation eludes many of us
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  Speaker 1: watching markets today because, you know, before today, the explanation
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  Speaker 1: was that, oh, well, this is just a rotation, right?
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  Speaker 2: We've seen this before.
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  Speaker 1: This has actually been happening beneath the surface, even though
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  Speaker 1: the index level moves haven't necessarily shown it. We've seen
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  Speaker 1: investors kind of gone back and forth out of tech
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  Speaker 1: into non-tech sectors and then back again. And then today,
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  Speaker 1: that theory just went out the window because everything was
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  Speaker 1: selling off. I was looking at the equal weight S &
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  Speaker 1: P 500 earlier. It was still in the green at
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  Speaker 1: the beginning of the session. I, that fell by the
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  Speaker 1: wayside by the close. And so now it's kind of,
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  Speaker 1: the question is a broad sell-off.
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  Speaker 2: Is it a foot? Also the question I have as well.
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  Speaker 1: Right.
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  Speaker 2: Well, the VIX ended up closing. So it closes around
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  Speaker 2: four 15, 15 minutes after, but it, yes, exactly. So
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  Speaker 2: it closed below 20.
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  Speaker 1: It was a 19, a spot for there.
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  Speaker 2: So even though we.
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  Speaker 1: Saw it spike around 24, 25 earlier today, we did see,
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  Speaker 1: we were talking about this earlier that volatility and some
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  Speaker 1: of it coming in toward the closing bell.
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  Speaker 2: So whenever you're speaking with your sources, whether they're watching.
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  Speaker 1: Price technicians, what do they think that means for the
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  Speaker 1: setup potentially?
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  Speaker 2: Does that bode well if you're going into Monday?
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  Speaker 3: Yeah.
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  Speaker 1: I mean, very interesting too, Jess, because again, even in
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  Speaker 1: volatility markets, there's so much going on beneath the surface
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  Speaker 1: that the index moves aren't necessarily reflecting. Those micro levels. Absolutely.
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  Speaker 1: And we're seeing a lot of hedging to one side
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  Speaker 1: or the other, beneath that surface. And so what that's
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  Speaker 1: telling me is there's not one kind of macro or catalyst,
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  Speaker 1: one big catalyst that's moving everything. There's a lot of
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  Speaker 1: kind of different little things that investors are responding to.
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  Speaker 1: And that's where we're not necessarily kind of seeing those
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  Speaker 1: big index moves apart from today that we've seen. And
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  Speaker 1: moving forward, that really, I think maybe creates a little
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  Speaker 1: bit more bifurcation in markets, right? And that's kind of
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  Speaker 1: the big question, the existential question that we're trying to
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  Speaker 1: get at is, what's going to separate the winners and
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  Speaker 1: losers now heading into next week? From the earnings perspective,
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  Speaker 1: was it cash? And then just on a broad markets perspective,
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  Speaker 1: is it, right?
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  Speaker 3: I mean, we might have to have this conversation with
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  Speaker 3: you on Tuesday after we get from Apple. Because that
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  Speaker 3: could be one that shows us that, okay, maybe investors
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  Speaker 3: are continuing to, at least right now, award companies, their
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  Speaker 3: favorite companies that are not spending so much on CapEx.
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  Speaker 2: Yeah, absolutely.
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  Speaker 1: I mean, that seems to have become the sticking point
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  Speaker 1: now in this earnings season, right? Because even though we've
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  Speaker 1: seen still kind of a healthy set of results from
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  Speaker 1: the big tech companies, but it really is all about
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  Speaker 1: that cash flow now, that CapEx figure, and whether they're
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  Speaker 1: showing enough to justify how much they're spending on AI. Now, Apple, though,
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  Speaker 1: I'm kind of interested in how their push toward hardware
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  Speaker 1: and products is going to fare when we're in this
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  Speaker 1: environment where affordability is also an issue.
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  Speaker 3: Yeah, but look at how quickly they sold out, and
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  Speaker 3: we don't know the exact inventory of the foldable phones.
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  Speaker 2: Because it's a $ 2, 000 phone. That's true. You have to
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  Speaker 2: be at a certain part of the K to drop
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  Speaker 2: 2K on a smartphone. That's right, yeah.
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  Speaker 1: I mean, yeah, perhaps the K-shaped economy is going to
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  Speaker 1: help them in this case, catering to Doza, the premium
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  Speaker 1: part of the K.