Stock Markets Risk Correction after AI Boom, ECB Blog Says -- Market Talk

1413 GMT - With stock-market valuations sky-high as investors make big bets on artificial-intelligence technology, a market correction looks probable, European Central Bank economists say in a blogpost. The rally in the tech sector has brought valuations to levels last seen during the dot-com bubble, they say. "Economic research on past technological revolutions points to a worrisome conclusion: a correction of current stock-market valuations is likely." Unlike during the dot-com bubble, there is less room this time to cut interest rates or use fiscal policy to cushion the fallout, they say. A correction would have severe consequences for the eurozone through investors' direct exposure to the U.S.'s Magnificent Seven tech stocks, and the "overexuberance" in European stock markets themselves, the economists add. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

August 17, 2026 10:13 ET (14:13 GMT)