This article first appeared on GuruFocus.
Renewed volatility linked to artificial-intelligence disruption has prompted a sharp shift in investor positioning, following a roughly $285 billion global selloff in AI-sensitive stocks. US equity futures stabilized after the move, with S&P 500 futures up 0.1% and Nasdaq 100 (NASDAQ:QQQ) contracts little changed ahead of Alphabet (NASDAQ:GOOG) earnings. The pullback appeared to accelerate a rotation toward smaller, more economically leveraged shares, as investors reassessed exposure to large-cap technology amid fresh concerns tied to automation.
In Europe, equity markets were broadly steady, but leadership diverged sharply. Energy shares outperformed as rising crude prices supported the sector, while technology lagged, weighed down by software names including RELX (NYSE:RELX) and SAP (NYSE:SAP). Novo Nordisk (NYSE:NVO) fell 18% after issuing a weaker sales outlook, adding to pressure on the regional healthcare complex. Elsewhere, gold reclaimed the $5,000-an-ounce level, while the dollar and US Treasuries were little changed, suggesting investors may be rotating within risk assets rather than exiting markets altogether.
The latest bout of selling was triggered by the launch of a new automation tool from Anthropic, with losses spilling beyond technology into financial services and asset managers. Mohit Kumar of Jefferies International said the firm has been allocating away from US tech, arguing that small caps could outperform in coming quarters as regulatory and macro conditions potentially support a broader rally. In commodities, oil extended gains for a second day after the US downed an Iranian drone in the Arabian Sea, lifting Brent to around $68 a barrel, while bitcoin hovered near $76,000 and the yen weakened amid expectations of an election victory for Japan’s Liberal Democratic Party under Prime Minister Sanae Takaichi.
