The Asia-Pacific markets took a hit on Wednesday, mirroring the losses on Wall Street, which were primarily driven by concerns over AI valuations. This downturn followed comments from the CEOs of Goldman Sachs and Morgan Stanley, who warned investors of a potential market correction over the next two years. The S&P 500 declined by 1.17%, closing at 6,771.55, while the Nasdaq Composite traded down 2.04%, finishing at 23,348.64. The Dow Jones Industrial Average lost 0.53%. Notably, Palantir shares dropped by 8%, despite the software company beating Wall Street's estimates for the third quarter and providing strong guidance, indicating growth in its AI business. This AI-related sell-off has led to a significant increase in the S&P 500's forward price-earnings ratio, reaching levels not seen since 2000. As AI stocks have lifted the broader market to new heights, experts like Anthony Saglimbene of Ameriprise caution that without a pullback, valuations are becoming alarmingly stretched.
