Data 'fog' pushing investors to the exits as AI stock valuation fears flare

The US shutdown has ended, but the hangover is just beginning for investors, who worry gaps in economic data will delay or even derail Federal Reserve rate cuts just as concerns over lofty Al stock valuations have put fresh pressure on companies' stocks and bonds.

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Unease drove the heaviest sell off for the rate-sensitive Nasdaq in a month on Nov 13. The index, which has soared in 2025 with booming AI shares, is down about 4 per cent from October's peak.

Pressure continued in early trade on Nov 14, with blue chip bourses from Tokyo to Paris and London deep in the red, but eased later in the day with the S&P 500 ending slightly lower and the Nasdaq Composite up 0.13 per cent. Even gold and Bitcoin were not spared, the latter hitting lows last seen in May.

Credit spreads - or the premium over US Treasuries paid by companies to issue bonds in the US market - widened earlier in November.

"The market certainly has some froth both in terms of valuations and expectations", said Mr Michael McGowan, managing director of investment strategy at Pathstone. "I think there's a healthy scepticism coming into the market and you could certainly see that continue to play out a little more," he said.

The problem is being exacerbated by an information vacuum that ranges from futures positioning to crop estimates and in particular job and price figures, some of which were not collected during the 43 days of shutdown.

There is doubt about the publication of October's inflation data and the employment report for that month will not include the jobless rate, White House economic adviser Kevin Hassett said, because the household survey from which it is calculated was not conducted.