Is the US stock market in an AI bubble?

Is the US stock market in an AI bubble? Russ Mould examines the warning signs emerging in US equities and what investors should watch next.

Three major forces have supported the US stock market: expectations of lower interest rates, booming artificial intelligence investment and a pro-business political environment. But all three are facing challenges, raising questions about valuations, corporate earnings and the sustainability of the AI boom.

In this week's AJ Bell investment update, Russ Mould explores whether US equities are becoming increasingly vulnerable and examines the historical patterns that have preceded previous financial market bubbles.

In this video, Russ covers:

• Why changing US Federal Reserve policy could challenge stock market valuations
• How AI investment is affecting the cash flow of America's biggest technology companies
• Whether political changes could threaten expectations for future corporate earnings
• Why traditional valuation measures suggest US equities are historically expensive
• The difference between a price bubble and an earnings bubble
• The eight stages of a financial market bubble, from initial excitement to eventual collapse

Drawing on Charles Kindleberger's Manias, Panics & Crashes, Russ considers how previous market bubbles have developed and what their history might tell investors about today's markets.