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Fears that the US economy is slowing, with firms shedding jobs and imposing hiring freezes, sent Wall Street tumbling on Thursday. The S&P 500 index of leading firms was down 1.1% as investors also highlighted concerns about the potential for a slump in the value of businesses that have benefited from huge investments in artificial intelligence. The tech-heavy Nasdaq Composite fell 1.9%.
A report showed that last month was the worst October for US layoffs since 2003, which grabbed the attention of investors in the absence of official data delayed by the federal government shutdown. Companies cut jobs and imposed hiring freezes, according to the global outplacement firm Challenger, Gray & Christmas.
Chris Beauchamp, the chief market analyst at the trading platform IG.com, said “The lack of US data and the ongoing government shutdown is making investors nervous.” US markets have been rattled by a review of Donald Trump’s tariffs by the supreme court, which could result in the US president being forced to abandon his flagship policy. Beauchamp added that "If the supreme court rolls back some of the tariffs then inflationary worries will subside to an extent, though this is a topic that will not come to fruition for weeks.”
A lack of official data has also forced the Federal Reserve to judge the state of the US economy with only a fraction of the information it would usually sift before judging the level of interest rates. Beauchamp further said the Fed and financial markets had found themselves “groping around in the dark” after the suspension of inflation and employment data.
Speaking on CNBC, the Fed board member Austan Goolsbee said the lack of official data on inflation during the government shutdown accentuated his caution about cutting interest rates further. “I lean more to the: when it’s foggy, let’s just be a little careful and slow down,” he said.
The survey by Challenger, Gray & Christmas found that employers announced 153,074 job cuts last month, compared with 55,597 in October 2024. It said US firms announced the termination of 1.09m roles during the first 10 months of this year, up 44% from the 761,358 cuts in 2024. Technology businesses led private-sector layoffs, it added.
The FTSE 100 fell 41 points or 0.4%. European stocks also fell. The Stoxx Europe 600 closed 0.7% lower, with tech stocks suffering the heaviest losses, and the Dax in Germany fell 1.3%.
Tech valuations have ballooned, and fears of a bubble loom large. “In the US, most of the big tech beasts have reported earnings but there is still lingering concerns about those lofty valuations and the mind-boggling sums of cash being invested into the AI dream,” said Danni Hewson, head of financial analysis at AJ Bell.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
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Bonkers dollars in AI
Maybe you’ve heard that artificial intelligence is a bubble poised to burst. Maybe you have heard that it isn’t. (No one really knows either way, but that won’t stop the bros from jabbering about it constantly.)
But I can confidently tell you that the money being thrown around for AI is so huge that numbers have lost all meaning. The companies pouring money in are so rich and so power-hungry (in multiple meanings of that term) that our puny human brains cannot really comprehend.
So let’s try to give some meaning and context to the stratospheric numbers in AI. Is it a bubble? Eh, who knows. But it is completely bonkers.
• In just the past year, the four richest companies developing AI — Microsoft, Google, Amazon and Meta — have spent roughly $360 billion combined for big-ticket projects, which included building AI data centers and stuffing them with computer chips and equipment, according to my analysis of financial disclosures.
(Amazon founder Jeff Bezos owns The Washington Post.)
That same amount of money could pay for about four years’ worth of the Supplemental Nutrition Assistance Program (SNAP), the federal government program that distributes more than $90 billion in yearly food assistance to 42 million Americans. SNAP benefits are in limbo for now during the government shutdown.
• How do companies pay for the enormous sums they are lavishing on AI? Mostly, these companies make so much money that they can afford to go bananas.
One example: Google’s sales from showing us digital advertisements, $212 billion so far in 2025, are more than the annual revenue of Texas taken in from all sources, including from all state taxes, income from the federal government and land income.
• Eight of the world’s top 10 most valuable companies are AI-centric or AI-ish American corporate giants — Nvidia, Apple, Microsoft, Google, Amazon, Broadcom, Meta and Tesla. That’s according to tallies from S&P Global Market Intelligence based on the total price of the companies’ stock held by investors.
My analysis of the S&P data shows that the collective worth of those eight giants, $23 trillion, is more than the value of the next 96 most valuable U.S. companies put together, which includes many still very rich names such as JPMorgan, Walmart, Visa and ExxonMobil.
• No. 1 on that list, the AI computer chip seller Nvidia, last week become the first company in history to reach a stock market value of $5 trillion.
That alone was more than the value of entire stock markets in most countries, Bloomberg News reported, other than the five biggest (in the U.S., China, Japan, Hong Kong and India). Alas, Nvidia was down to a measly $4.4 trillion as of Friday morning.
• All the announced or under-construction data centers for powering AI would consume roughly as much electricity as 44 million households in the United States if they run full tilt, according to a recent analysis by the Barclays investment bank as reported by the Financial Times.
For context, that’s nearly one-third of the total number of residential housing units in the entire country, according to U.S. Census Bureau housing estimates for 2024.
• Nvidia pledged this fall to invest up to $100 billion in ChatGPT parent company OpenAI as part of its insatiable hunger for cash and resources. (The Post has a content partnership with OpenAI.)
Or, nearly the equivalent amount could be spent on police, firefighters, courts, public schools and hospitals, social services, parks and more for 8.5 million people. The government spending of New York, the largest city in America, was $118 billion in the last fiscal year.
Outside of the AI-related activities, the other sectors are fairly quiet. Labor market is weak even the holiday hiring generally picks up rapidly. Perhaps consumers will buy half of a doll instead of 20. What would happen if consumers should cut their discretionary shopping by 50%.this holidays? Last i shop at Costco the customers are buying predominately grocery and very few big TVs and furnitures.
This Administration is asking the Supreme Court to het him to hold up the SNAP funding. A quick denial reply is in order and direct them to lower court’ ruling immediately.
Obey the Law? We don't need no stinking laws. Unless it's some we LIKE.
US supreme court issues emergency order blocking full Snap food aid payments... High court’s order comes after appeals court rejected Trump administration’s request to block November benefits
Comment: Well, Trumpian chaos, as usual. We have to give the "lower" courts credit though... unlike the Supines they are doing their damndest to hold Trump in check.
Never before have the Courts needed their own Enforcement Militia. This is what happens under fascist gestapo regimes. The Repugnants have been getting away with ignoring the Courts for decades. Carl Rove. Oliver North was granted amnesty just to get him to testify. And Gingrich the Newt. He shredded our political system.
https://www.theatlantic.com/magazine/archive/2018/11/newt-gingrich-says-youre-welcome/570832/
Now it's up to the 1st Circuit. They will have to decide on accepting the appeal, and whether or not to issue a stay pending that appeal hearing. It's predictable that if the 1st Circuit denies the government's appeal, then Trump will once again appeal to the Supine Court to overrule the 1st Circuit.
In other words, it will be one very long time before the judicial branch has anything definitive to say on this whole thing, and a lot of people are going to get very hungry while all of this plays (and I do mean "plays", because it's all a big game to Trump) out.
These rulings are appealed to the U.S. Supreme Court which frequently expedites the case
and places it on the "shadow docket." The shadow docket was previously rarely used
only for certain emergency decisions. Shadow docket cases have no oral arguments,
limited briefings, and rulings with little or no analysis of the Court’s reasoning.
There is a significant increase in the number of these cases under the current Trump administration.
“A clear pattern has emerged: The Court is using the shadow docket to quickly and dramatically
expand executive power. As Justice Elena Kagan wrote in a dissent, 'Our emergency docket
should never be used, as it has been this year, to permit what our own precedent bars.
Still more, it should not be used, as it also has been, to transfer government authority
from Congress to the President, and thus to reshape the Nation’s separation of powers.'”
https://www.brennancenter.org/our-work/research-reports/supreme-court-shadow-docket-tracker-challenges-trump-administration