Monday 2-02 #bubblewatch

Welcome to February bubblewatchers! It's been weird over the weekend and today.

1. The boom in precious metals sagged; I guess those goldbugs and debasers weren't all that serious about hedging against hyperinflation

2. But the crypto selloff continued, albeit at a slower pace because there's even less buyers

3. The dollar is finally going back up a bit

4. Stock trading was mixed, Asia down

> TRADING DAY Solid data over hard assets. https://www.reuters.com/world/asia-pacific/global-markets-trading-day-graphic-2026-02-02/

Tuesday 2-03 #bubblewatch

Bubblewatch is late tonight because of Reuters. It's not my fault.

Oh, OK. I forgot to recheck if they finally posted a market recap until now. But they were late first!

Anyway… The entire market, including – because I'm posting so late – Asian stocks, is down. Tech stocks are especially hard hit, nearly a percent and a half.

> Asia shares wobble, oil prices climb and gold makes a comeback. https://www.reuters.com/world/china/global-markets-global-markets-2026-02-04/

Also, whoever was selling their gold horde ran out…

Wednesday 2-04 #bubblewatch

I complained about Reuter's being slow with their market recap yesterday. Today's is not only on time, it is also on the front page as the leading article!

> As software stocks slump, investors debate AI's existential threat. https://www.reuters.com/business/media-telecom/global-software-stocks-hit-by-anthropic-wake-up-call-ai-disruption-2026-02-04/

And, yeah, #AI stocks are down. But so is the rest of the market. But the real news is the way market analysts are finally starting to call AI booster promises into question as actual results of AI rollouts come in.

And there's a whole lot more related AI bubble, market, and economic news today. Here's some related Fedi posts I want to tag for this thread:

> https://wandering.shop/@cstross/116014302245484163

> https://mastodon.social/@Thriveth/116012919113270372

> https://toot.kuba-orlik.name/@kuba/116012356491544497

> https://rustedneuron.com/@jackwilliambell/116013952556110722

> https://rustedneuron.com/@jackwilliambell/116014249854398674

Thursday 2-05 #bubblewatch

Yesterday's market woes continue, with tech stocks dropping *another* percent and a half. Or, if you use the market analyst nomenclature, more than 150 'points'.

> Wall Street ends sharply down as #AI worries weigh. https://www.reuters.com/business/sp-nasdaq-futures-subdued-markets-digest-alphabets-ai-spending-plans-2026-02-05/

No, this isn't a 'Bear Market' or even 'Bear Territory'. It isn't even a 'Correction', at least not yet. However, CNN has moved the 'Fear and Greed Index' well into 'Fear'.

> https://www.cnn.com/markets/fear-and-greed

What's happening right now is far from a market crash. In fact, if it were to continue for long enough to actually become a Bear Market? Then the #AI #bubble will have largely deflated without doing significant damage to the economy.

One can hope. Or, tomorrow, we could wake to find investors have lost all confidence. Which itself wouldn't shift the economy drastically, but could have knock-on effects that do.

I'll keep bubblewatching.

Friday 2-06 #bubblewatch

Today the market rallied and gained back value, with industrials hitting a new high as smart money moved. But even #crypto came back.

> Dow closes above 50,000, Nvidia soars as traders focus on AI spending. https://www.reuters.com/business/futures-stabilize-after-tech-rout-amazon-slides-ai-capex-lift-2026-02-06/

Thing is, the market is far from rational and, in fact, is driven almost entirely by vibes and fashions. And those vibes and fashions can change at the drop of a hat.

In this case most #AI stocks were still losing value, but Nvidia surged.

Recap of last week's #AI stock drop, with some analysis. Tomorrow begins another week of #bubblewatch, but the Asian markets open soon and may give us some insight as to how it will go, especially with tech stock futures.

> Investors chase cheaper, smaller companies as risk aversion hits tech sector. https://www.reuters.com/legal/legalindustry/investors-chase-cheaper-smaller-companies-risk-aversion-hits-tech-sector-2026-02-08/

Monday 2-09 #bubblewatch

Last week's tech stock selloff ended with a slight rally on Friday, mostly revolving around NVidia. Today that rally continued – and continued to be 'slight'. AI company values, other than chipmakers, currently stand at 13% below values before the selloff.

> Wall Street advances as tech bounces further off of recent losses. https://www.reuters.com/business/wall-st-futures-muted-markets-await-key-economic-data-2026-02-09/

Trying not to read too much into this, but could it be people investing in shovel makers instead of gold mines?

Tuesday 2-10 #bubblewatch

Today was generally more of yesterday. Except with the extra bad news that Treasury Yields and the dollar are falling.

> Stocks mixed but world index hits record high; Treasury yields fall. https://www.reuters.com/world/china/global-markets-global-markets-2026-02-10/

The one bright spot is Industrial stocks, which are doing well. Considering that is where the smart money gets parked when the financial near future is looking grim, this actually isn't good news.

The USA January Payrolls Report is due tomorrow.

Wednesday 2-11 #bubblewatch

The USA January Payrolls Report is in and is characterized as 'strong'. Which, although good news for the economy, is *not* good news for a stock market which rises and falls based on the latest prognostication of the the Prime Rate; indications are for continued higher inflation.

> Wall Street ends muted after strong jobs data nibbles at Fed rate cut bets. https://www.reuters.com/business/us-stock-futures-pause-ahead-january-employment-data-2026-02-11/

Meanwhile the tech stock slump continues. Monday's rally has been eaten away.

Thursday 2-12 #bubblewatch

One week ago, on this long-running thread, I said we didn't have a 'Bear Market' or even a 'Correction'.

Today? Two straight weeks of decline in tech stocks is now only a few percentage points short of a 'Correction'.

> Wall Street sinks as tech rout deepens on #AI angst. https://www.reuters.com/business/us-stocks-futures-edge-higher-data-eases-economic-worries-2026-02-12/

The January Consumer Price Index report comes out tomorrow. If it shows continued inflation, the market will reflect expectations of the Fed not dropping rates.

Friday 2-13 #bubblewatch

The January Consumer Price Index report is in and, well, 'mixed' is probably the best description. Cheaper gasoline, higher living costs. Not looking good for a Fed rate cut and *not* something that will juice the market.

> US consumer prices increase marginally, but inflation pressures persist. https://www.reuters.com/business/us-consumer-prices-rise-less-than-expected-january-2026-02-13/

And tech stocks are still under pressure.

> From software to real estate, U.S. sectors under the grip of #AI scare trade. https://www.reuters.com/business/software-real-estate-us-sectors-under-grip-ai-scare-trade-2026-02-13/

Monday 2-16 #bubblewatch

The headline for today's market recap is simply a reworded headline from last Thursday *and the previous Thursday*. (See up thread.) At this point we are in the third straight week of a major downturn in tech stocks, largely driven by weak showings for AI.

> Big tech stocks lose billions as AI spending fears hit valuations. https://www.reuters.com/business/retail-consumer/global-markets-marketcap-2026-02-16/

Microsoft alone is down 17% from the start of the year.

Expect to see analysts using the 'C word' ('Correction') soon.

MORE:

Although, is it really a Correction if only one market segment is down? Yet CNN's 'Fear and Greed Index' has swung back to 'Fear':

> https://www.cnn.com/markets/fear-and-greed

More importantly? The USA Treasury Yield Curve has inverted. Again. (It also inverted for a short time early last fall, back when I started bubblewatch.)

> This Signal Triggered Before the Last 4 Recessions. It Just Happened Again. https://www.fool.com/investing/2026/02/14/signal-triggered-before-last-4-recessions-again/

And then there's the 'Hindenburg Omen'.

[contd]

> https://en.wikipedia.org/wiki/Hindenburg_Omen

I've mentioned the Hindenburg Omen before, but it hasn't come up recently. And, frankly, it's incredibly technical, somewhat controversial, and not always an actual predictor.

But guess what market signal set off alarms at the end of January, right at the beginning of this three week slump?

> S&P 500 Slumps as Hindenburg Omen Fuels Investor Anxiety. https://www.tipranks.com/news/sp-500-slumps-after-activation-of-hindenburg-omen-signal

[fin]

Tuesday 2-17 #bubblewatch

Or maybe we don't quite have a full third week of downturn in tech stocks? Do note: despite the headline tech stocks are still underwater from January.

> Equities close with slight gains as tech shares recover. https://www.reuters.com/sustainability/sustainable-finance-reporting/us-stock-futures-slip-persistent-ai-disruption-fears-2026-02-17/

Check this space tomorrow and Thursday to see if it turns out it was just bargain hunters buying the dip or a real recovery.

Wednesday 2-18 #bubblewatch

There was a small rally in US stocks today, but no big movements; in fact morning gains were nearly completely gone by the market close.

> US stocks follow European shares higher; geopolitical jitters boost oil, gold. https://www.reuters.com/world/china/global-markets-global-markets-2026-02-18/

So we still have no clear indication if the market downturn will continue or not. However, precious metals are hot again; indicating some level of economic fear.

Thursday 2-19 #bubblewatch

Two days ago, up-thread, I said:

> "Check this space tomorrow and Thursday to see if it turns out it was just bargain hunters buying the dip or a real recovery."

Guess what?

> Wall Street dips as Nvidia slides and private equity stocks sink. https://www.reuters.com/business/us-stock-futures-slip-focus-turns-ai-worries-walmart-earnings-2026-02-19/

It's 'dip' and the downturn continues for a third week in a row. And, yes, it's pretty much all tech stocks taking a hit. CNN's Fear and Greed Index remains solidly on 'Fear'.

> https://www.cnn.com/markets/fear-and-greed

Monday 2-23 #bubblewatch

Sorry, no bubblewatch last Friday because I was out of town running errands and visiting family. Which, as it turns out, is just as well because Friday's Supreme Court ruling smacking down the Administration's unlawful tariffs resulted in a very short-lived recovery.

Today that recovery is gone and more and the market downturn extends into it's fourth week.

> Wall Street ends sharply lower amid AI displacement fears and revived tariff angst. https://www.reuters.com/business/wall-st-futures-dip-tariff-doubts-hit-risk-appetite-2026-02-23/

In fact? Today the market took an absolute BATH. All major indexes down a percent or more. Tech and Financial stocks down nearly 5% on aggregate from Friday. Precious metals are again surging.

And the market's overall performance for the last month isn't any better; see screenshot.

We probably are not officially in 'Correction' territory, but it's certainly true market sentiment is no longer leaning towards AI and the banks funding their data center buildouts.

This is an interesting development.

> Goldman Sachs launches SPXXAI S&P 500 index excluding AI-related stocks. Goldman Sachs has launched SPXXAI, an S&P 500 index that excludes AI-related stocks to let investors avoid AI exposure amid the current hype. https://www.prismnews.com/news/goldman-sachs-launches-spxxai-sp-500-index-excluding-ai-related-stocks

#AI #bubblewatch

Tuesday 2-24 #bubblewatch

It's a good thing I usually avoid trying to prognosticate in this thread, because I would have said yesterday that today would be more of the same slow deflation of the #AI #bubble. But the market insists on being irrational…

> Wall St bounces back on renewed tech vigor, easing AI concerns. https://www.reuters.com/business/us-stock-futures-steady-after-mondays-battering-tariffs-ai-concerns-dominate-2026-02-24/

Still, there remain indications some segments of the market are not entirely stupid. See the Goldman Sachs new SPXXAI index mentioned up-thread.

Wednesday 2-25 #bubblewatch

Unless NVidia's earnings report tomorrow results in a complete market meltdown, I think we can say the three-week downturn in February did not extend into a fourth week. Between renewed optimism and bargain hunters 'buying the dip', it looks like AI/tech valuations are recovering.

> Wall Street extends tech-powered rally ahead of Nvidia earnings. https://www.reuters.com/business/us-stock-futures-inch-up-ahead-nvidia-earnings-ai-jitters-ease-2026-02-25/

Back when I started bubblewatch I fully expected to see the #AI #bubble pop by now…

Related: There are reports today saying Monday's big dip in the market was triggered by what is essentially a #ScienceFiction story!

It's styled as a 'A Thought Exercise in Financial History, from the Future' and consists of a retrospective look at a market crash *caused by AI*.

> THE 2028 GLOBAL INTELLIGENCE CRISIS. https://www.citriniresearch.com/p/2028gic

The scenario is based on the #AI #bubble continuing to expand and AI actually working as described – not on the bubble popping or AI disappointment.

#SFF

Weirdly, this could also explain the market recovery on Tuesday and Wednesday! After all, if AI really does become that successful there's plenty of money to be made on AI bets between now and the crash in the story. So the kind of investor (which is most of them) who only really cares about short term results may be doubling down.

Paul Krugman has his own opinions on all this, of course.

> When Extraterrestrials Attacked the Stock Market. https://paulkrugman.substack.com/p/when-extraterrestrials-attacked-the

Thursday 2-26 #bubblewatch

I said this up-thread yesterday:

> "Unless NVidia's earnings report tomorrow results in a complete market meltdown, I think we can say the three-week downturn in February did not extend into a fourth week."

And?

> Wall St slides as tech rally stalls, AI enthusiasm wanes after Nvidia results. https://www.reuters.com/world/africa/us-stock-futures-waver-nvidias-blockbuster-results-draw-muted-response-2026-02-26/

So it looks like the previous two days were bargain hunters buying the dip and the tech stock slide continues into a fourth week.

Friday 2-27 #bubblewatch

Since the current market downturn started on a Thursday, today's market performance means we are entering the fifth straight week of overall decline in Tech and Fin stocks.

The NASDAQ is down 5% for the month. The S&P is down nearly 2%.

> Wall St on course for monthly declines on AI worries, renewed tariff angst, geopolitical strife. https://www.reuters.com/business/us-stock-futures-falter-ai-jitters-nasdaq-braces-steep-monthly-fall-2026-02-27/

So, still not enough to evoke the 'C' word. ('Correction'.) But expect analysts to start using it anyway…

Monday 3-02 #bubblewatch

FWIW? I really didn't think I'd still be doing this thread in March. I expected the #AI bubble to pop in January or February. But here we are…

And the market today is *weird*. The Iran war is dampening enthusiasm for *every market segment except AI*!

> Wall Street ends narrowly mixed, trading volatile after air strikes on Iran. https://www.reuters.com/business/wall-street-futures-slide-middle-east-conflict-escalates-2026-03-02/

I have no idea what's going on here. Oil and precious metals futures are off the charts, as expected. But AI stocks?

One analyst claims this is how the market responds to uncertainty.

> "Market participants think this is all just temporary and that the problems in the oil patch will disappear," said ​Bill Smead … investors were reverting to familiar, ‌high-performing stocks ⁠like Nvidia, the Magnificent Seven technology stocks and defense sectors. "When people get scared, they go back to what is comfortable."

¯\_(ツ)_/¯

Tuesday 3-03 #bubblewatch

Yesterday I said, regarding how the market responded somewhat positively to the Iran attacks:

> "I have no idea what's going on here."

Today? It's gone the other way and I still have no idea what's going on here.

> Wall Street indexes end lower as Middle East conflict fans inflation fears. https://www.reuters.com/business/wall-st-futures-fall-middle-east-conflict-stokes-inflation-worries-2026-03-03/

FWIW today's drop in Tech and Fin stock values is enough for me to claim the four-week downturn is continuing. Yesterday was a bump, not a stopping point.

Of course you could equally say Tech and Fin dropping is part of the whole market (aside from oil and precious metals) going sideways because war.

> “While not much ⁠has changed fundamentally since yesterday, investors are growing anxious about the duration of the war and its ​impact on energy prices," said Joseph Tanious…

But I think why the market moves away from high-risk investments isn't the point: When a bubble pops it doesn't matter if it was a cactus spine or a needle that pierced it.

Wednesday 3-04 #bubblewatch

At this point I'm wondering if I should just suspend bubblewatch for a week or so. I'm starting to get queasy from the rollercoaster…

> US stocks close up on Iran diplomacy hopes; tech leads rebound. https://www.reuters.com/business/wall-street-futures-slip-middle-east-conflict-oil-driven-inflation-concerns-2026-03-04/

And, I've said this before, but anyone who believes in the 'Wisdom of the Market' is an idiot. Because the rational move right now is to take your money someplace safe and wait to see how things shake out.

Not buying a ticket for another ride…

Thursday 3-05 #bubblewatch

And the rollercoaster goes down again.

> Wall Street extend losses as investors weigh Middle East war risks. https://www.reuters.com/business/us-stock-futures-slip-investors-weigh-middle-east-war-fallout-2026-03-05/

Since today closes out the 4th week of the ongoing downturn, here are the value changes over the last week and month for USA indexes:

IDX Week Month

Dow -3.69% -2.52%
NASDAQ -1.35% +0.05%
S&P -1.78% -0.24%
FTSE -3.99% +1.02%

Friday 3-06 #bubblewatch

War, oil prices spiking, a bad jobs report, Anthropic's fight with the USA Administration, several studies showing LLMs not returning on business investment, and an already sagging stock market.

Will the #AI #bubble finally pop soon?

> Dow and S&P touch 3-month low as Middle East, weak jobs report weigh. https://www.reuters.com/business/wall-st-futures-slip-middle-east-conflict-rages-jobs-data-focus-2026-03-06/

Who knows? I certainly don't, because I would have said 'January or February' if you'd asked me in September.

Saturday update:

Let's talk about 'force majeure'.

> https://en.wikipedia.org/wiki/Force_majeure

It's a clause in contracts which, "… essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war … prevents one or both parties from fulfilling their obligations under the contract."

As of this morning nations and corporations across the Middle East have declared 'force majeure' for oil and mineral contracts.

[contd]

This is the first step in shutting down oil production and mines. We may see it for other than extractive industries as well, so long as they can claim impact from the Iran crisis.

In some cases this may mean entire contracts are null and void and, in the future, new contracts must be negotiated. But even if such is *not* the case, once shut down the oil rigs and mines will not be able to come back online immediately when the crisis has passed.

This is very bad for the stock market.

[contd]

The ripple effects of these mass force majeure cancellations means other contract cancellations around the world as the raw materials become unavailable at a reasonable price. Even in cases where manufacturing does not stop, prices will go up and profits will go down.

Meanwhile stock market valuations are based on a number of factors, most of which are not 'current' so much as 'projected'. But force majeure cancellations and the ripple effect throws those projections out the window.

[contd]

This long-running thread (since last September) is intended to track tech stocks, specifically those participating in the #AI #bubble, and watch for a possible collapse in values. But those stocks do not exist in a vacuum: they are part of the larger market and are affected by moves in the larger market.

And right now? The larger market, especially industrial and finance stocks, is poised to go boom. This doesn't mean it will, but the possibility exists.

And even if it doesn't?

[contd]

Even if it doesn't crash, unless something changes soon there are likely to be effects on the market ranging from a 'Correction' to a 'Bear Market'.

And there's a good chance the coming global hiccup in the market is the final straw required for people to start pulling their money out of the AI bubble.

Meaning we might be in for a more general market crash and associated global economic impacts, but even if not? The AI bubble is that much more likely to pop.

Because of war…

[fin]