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]

Monday 3-09 #bubblewatch

So, one serving of TACO and the market rallies.

> Wall St ends higher as hopes of Iran war resolution offset inflation fears. https://www.reuters.com/business/wall-st-futures-slump-iran-war-drags-oil-near-120-stokes-inflation-worries-2026-03-09/

This thread is about the #AI #bubble and economics, not politics. So I'll skip editorializing and instead complain about the idiots running market values up and down based on their feelings and the promises of a known serial liar.

Also? It's not over. I fully expect more rollercoaster action over the next week…

Tuesday 3-10 #bubblewatch

More of yesterday. I'm not going to bother commenting.

> Wall Street gains as oil slides, markets monitor Middle Eastern developments. https://www.reuters.com/business/wall-st-futures-rise-hopes-early-end-middle-east-conflict-2026-03-10/

Update for 3-10:

After I posted today's #bubblewatch the market went kerblewie. (kerblooie?)

> Wall St closes mixed on ramped-up Middle East tensions. https://www.reuters.com/business/wall-st-futures-rise-hopes-early-end-middle-east-conflict-2026-03-10/

NOTE: The spellchecker is proposing 'bloodsucker' as the proper spelling for 'kerblooie'. I'm not sure what to make of that…

Wednesday 3-11 #bubblewatch

More rollercoaster. The USA Administration lies about the Iran war, stocks go up; oil goes down. The lies are exposed, stocks go down; oil goes up. It must be stomach churning for the traders on that ride – but I want to know why they buy the lies in the first place.

> S&P 500, Dow end lower as escalating Iran war sours risk appetite. https://www.reuters.com/business/wall-st-futures-rise-hopes-early-end-middle-east-conflict-2026-03-10/

Note that this is actually from early morning YESTERDAY, simply updated for today's market close.

But that's not all. First? CNN's 'Fear and Greed Index' is hovering right above 'Extreme Fear' and only current stock prices and market churn are keeping it from bottoming out.

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

And pulling that needle down? The smart money is moving to 'safe havens' in a big way.

But all of this is about general market forces, not the #AI #bubble specifically. So, what about that?

Well, for that I'm going to pass the baton over to Ed Zitron; who, once again, is doing the math and showing us the other journalists and analysts are failures who simply report the BS numbers they were fed; not bothering to verify them against reality.

> The AI Bubble Is An Information War. https://www.wheresyoured.at/the-ai-bubble-is-an-information-war/

> "Yet again, the media is simply repeating what they’ve been told versus reading publicly-available information."

> "… this sounds exactly like a ponzi scheme!"

Read it all.

If you are paying attention you may have already noticed, but the common thread for today is people uncritically believing outright lies, then being slapped with the reality fish in the face, and then believing the next set of lies.

Round and round and up and down the rollercoaster goes. But you always end up in the same place as if you had never gotten on in the first place.

Thursday 3-12 #bubblewatch

You know that big drop before the rollercoaster inverts and screams around a corner with you hanging upside down?

We just went over the top and started dropping. Don't be surprised if you lose your keys and wallet. And don't look at your investments today…

> Wall St dives as Iran war heats up, soaring crude prompts flight to safety. https://www.reuters.com/business/wall-street-futures-drop-middle-east-tensions-lift-oil-above-100-2026-03-12/

The CNN 'Fear and Greed Index' has dropped all the way down to 'Extreme Fear'.

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

Friday 3-13 #bubblewatch

Friday the 13th is an unlucky day for stock values as we enter a fifth straight week of market downturn.

> Wall St drops, set for weekly loss as war on Iran fuels inflation worries. https://www.reuters.com/business/wall-st-futures-subdued-middle-east-unrest-fuels-inflation-worries-data-awaited-2026-03-13/

So, where are we now?

IDX Week Month

Dow -1.76% -5.74%
NASDAQ -1.13% -1.84%
S&P -1.37% -2.78%
FTSE -0.23% -1.77%

Weekend #bubblewatch reading. The thesis? "Because bubbles are good, really."

> Even Silicon Valley Says That AI Is a Bubble. An AI crash could bring down the economy. Some in the tech world think that’s the price of progress. https://www.theatlantic.com/technology/2026/03/ai-bubble-defenders-silicon-valley/686340/

Archive link:

> https://web.archive.org/web/20260313051744/https://www.theatlantic.com/technology/2026/03/ai-bubble-defenders-silicon-valley/686340/

#AI #bubble

Monday 3-16 #bubblewatch

And the rollercoaster goes for yet another round. Up today.

> Stocks rise as oil prices fall; flurry of central bank meetings on tap. https://www.reuters.com/world/china/global-markets-global-markets-2026-03-16/

Once again? This is just stupid people believing obvious lies.

> "There's things out there that are leading people to believe that we're going to be able to open and defend the Straits of Hormuz. I don't know that I'm buying that one, but that's what's causing the rally," said Stephen Massocca…

NOTE: If it hasn't happened already, expect Iran to start accepting million dollar 'tolls' for ships to safely transit the Straits of Hormuz. This seems like an obvious next move since they have limited options for getting money right now, other than handouts from Russia and China.

This war isn't ending anytime soon unless the USA Administration is willing to unilaterally back off and walk away.

Tuesday 3-17 #bubblewatch

Slight gains today. But no indication gains will continue through the week.

> Wall Street ends up as traders focus on Fed. https://www.reuters.com/business/wall-street-futures-slip-higher-oil-prices-fuel-inflation-worries-ahead-fed-2026-03-17/

In fact, there is even some #AI #bubble action as:

> "Worries about pricey AI-related stocks, along with uncertainty about the Middle East ‌conflict, ⁠have dropped the S&P 500 about 4% from its record high close on January 27."

Some #bubblewatch reading.

> AI still doesn't work very well, businesses are faking it, and a reckoning is coming. https://www.theregister.com/2026/03/17/ai_businesses_faking_it_reckoning_coming_codestrap/

> Deeks argues that if you built an AI system from first principles, it would look drastically different from what's offered today. All the talk about the disappearance of software engineering and office work, he said, "we don't subscribe to any of that."

The central thesis? We don't even know the right metrics to apply to #AI use in #business.

[contd]

And then there's the whole issue of liability and insurance coverage.

> Smiley added: "The question here is if it's all so great, why are the insurance underwriters going to great lengths to prohibit coverage for these things? They're generally pretty good at risk profiling."

[fin]

Wednesday 3-18 #bubblewatch

And now we see why I barely reacted to the market being a bit up Monday and yesterday … today it's down further than those two days pushed it up. We remain on track for a fifth straight week of market downturn.

> Wall Street ends sharply lower after Fed keeps rates unchanged. https://www.reuters.com/sustainability/sustainable-finance-reporting/wall-st-futures-gain-oil-prices-slip-focus-fed-outlook-2026-03-18/

Also? Treasury yields are up in anticipation of higher inflation and no interest cut from the Fed.

NOTE: Higher interest rates are bad for #AI infra buildout.

Thursday 3-19 #bubblewatch

And today ends the fifth straight week of general market downturn.

> Wall Street ends down as traders see no rate cuts before 2027. https://www.reuters.com/business/us-stock-futures-dip-soaring-oil-prices-fed-outlook-spook-investors-2026-03-19/

FWIW? When the Fed and other central banks say 'inflation risk'? What they mean is, "Here it comes."

[contd]

Meanwhile, even chipmakers touting profits from the #AI #bubble are taking hits:

> "Micron Technology dropped after the memory chipmaker's quarterly forecast failed to impress investors who have sent its shares soaring over 50% this year on strong demand related to AI. Nvidia, the world's most valuable company, also lost ground."

But hardest hit seems to be finance stocks. Which is also not good for AI, as banks pull out of financing debt for data center buildouts.

[fin]

Friday 3-20 #bubblewatch

Sorry, I didn't update bubblewatch yesterday. Here is the catch-up: the market closed down in a big way yesterday, beginning the sixth straight week of general market downturn.

> Wall St Week Ahead Persistent Iran war, energy price surge set to sway wavering stocks. https://www.reuters.com/business/wall-st-week-ahead-persistent-iran-war-energy-price-surge-set-loom-over-stocks-2026-03-20/

So, where are we now?

IDX Week Month

Dow -2.11% -8.16%
NASDAQ -2.07% -5.41%
S&P -1.90% -5.83%
FTSE -3.34% -7.19%