Tech stocks, including Nvidia and Amazon, plummeted last week despite strong earnings. The US market fell 1.9%, with Nvidia down 15.7% from its peak. Amazon fell 5.25% after announcing a $12 billion bond issue. Alphabet rose 8.2% following a $3.7 billion investment from Berkshire Hathaway. Meta Platforms and Netflix both saw significant declines.

Consumer defensive, healthcare, and real estate sectors rose last week, while technology stocks dragged down emerging markets, particularly in China and Taiwan. Healthcare stocks gained 13.6% over the last three months. Investors are becoming more selective in identifying companies that can deliver returns from AI investments.

Private credit’s popularity is declining, as seen by Blue Owl’s failed merger. Semiliquid funds focused on private credit offer liquidity but may pose risks. Morningstar released new semiliquid fund ratings to support investors. Interest rate cut odds shortened due to weak employment data and uncertainty surrounding the Fed’s next meeting.

Economic data vacuum could lead to market volatility, exacerbated by ongoing geopolitical tensions. PCE inflation and US GDP growth estimates were delayed, leaving markets with limited data points. It is crucial for investors to avoid making rash decisions based on extrapolated news in such uncertain environments.

Read more at Morningstar: Markets Brief: Investors Aren’t Rejecting AI, They’re Just Being More Selective