| Mobile Web

ECB warns of shock scenario: Even if AI is real, stocks can still slump

European Central Bank economists warned that U.S. and European stocks near record highs on the back of an AI boom are likely to face a correction. In a blog, they outlined two scenarios: overheated investors pushing prices above fundamentals, and a case where AI boosts the economy but wider uncertainty drives up required risk compensation. They cited past technology revolutions and said euro zone investors may be exposed via funds heavy in the Magnificent 7.