"For decades, the United States stock market has been a juggernaut on the international stage. The US dollar has been - and still is - the de facto currency globally. But for how much longer that will be the case is now looking uncertain. As the New York Times reports, investors are starting to look elsewhere as the Trump administration continues to threaten the independence of its central bank, start a trade war with Europe, and implement self-conflicting monetary policies."
"Meanwhile, Wall Street continues to make enormous bets on artificial intelligence, a highly risky gambit, as tech companies still have plenty to prove and a return still appears to be many years out. The AI boom has sent tech company valuations soaring: the Magnificent Seven (Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA, and Tesla) now account for just over a third of the entire S&P 500, with experts warning that the industry could be propping up a rough-looking US economy."
"President Donald Trump's nomination for the next chair of the central banking system, Kevin Warsh, appeared to do little to stop the continued weakening of the US dollar, which hit a four-year low last week. The Euro and British pound saw their values soar when measured against the US dollar this year. Trump -also a huge AI booster, underlining the circular nature of the whole situation - celebrated the weakening dollar, arguing it would make products more affordable, in comments that alarmed investors."
The US dollar has weakened as investors shift capital toward Europe and Asia amid political pressure on central-bank independence, a brewing trade war with Europe, and mixed monetary signals. Large Wall Street wagers on artificial intelligence have driven tech valuations sharply higher, concentrating risk in a handful of mega-cap companies that now represent over a third of the S&P 500. The IMF warns that excessive AI optimism could trigger a damaging market correction. A presidential nomination for the central bank failed to stabilize the dollar, which hit a four-year low while the euro and pound appreciated and investor concern rose.
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