U.S stock-market outperformance to end? Bank of America, says, fiscal slowdown and lower immigration rates pose risks; DeepSeek to challenge tech-stock valuations
Bank of America's top strategist Michael Hartnett claimed that the days of US stocks beating global markets consistently might come to an end, as per a report.
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Hartnett said in a client note that «U.S. exceptionalism» has become too expensive and too well-owned, meaning outperformance could peak by 2025, reported Business Insider.
Factors affecting the US stock market
He cited several key factors for his outlook, including a surprise challenge in the tech sector from Chinese AI startup DeepSeek's latest AI model. Investors question whether the large investments into AI infrastructure will deliver the return on investment they had hoped for. DeepSeek's R1 chatbot rivals the capabilities of ChatGPT but offers a lower price and consumes much less energy, as per reports.
The strategist said «DeepSeek means peak in AI capex return expectations,» quoted Business Insider.
Hartnett also pointed out two more risks: a slowdown in US government spending and reduced immigration levels.
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