Forget the Fed, Trade and the Shutdown. For Markets, It’s All About AI

For all the headlines today about the Fed and trade deals, AI is still by far the dominant story in global markets. As Markets Live strategist Mark Cudmore writes today, everything else a noisy — and most likely unprofitable — sideshow.

In his view, despite the fact that the vast majority of people in markets see a bubble in AI capex bubble, that’s not necessarily a reason to be bearish right now. “The best way to make money in markets is to spot a bubble early and hop onboard as it inflates,” he writes. “If you want to be bearish, then you must have a reason why the bubble is about to burst, and I’m not seeing any good one yet.”

Nvidia becoming the world’s first $5 trillion company, and Tesla inching toward a fresh all-time high, its first this year, underscores the sense among investors that AI is the only game in town. Bloomberg’s Magnificent 7 index is up 27% this year after jumping 67% in 2024 and more than doubling in 2023.

It happens all the time in the biotech world: a binary event, usually the outcome of a clinical trial, sends the shares of a fledgling company soaring or plunging 30%, 50%, 80% in a day.