Finance & economics | Fly up to the sky

Stockmarkets are booming. But the good times are unlikely to last

Although AI is propelling valuations, there are deeper forces at work

Illustration of a woman looking through binoculars that show dollar signs on the lenses
Illustration: Alberto Miranda
|New York

Everywhere you look, stockmarkets are breaking records. American equities, as measured by the S&P 500 index, hit their first all-time high in more than two years in January, surged above 5,000 points in February and roared well above that level on February 22nd when Nvidia, a maker of hardware essential for artificial intelligence (AI), released spectacular results. The same day, Europe’s STOXX 600 set its own record. Even before Nvidia’s results had been announced, Japan’s Nikkei 225 had surpassed its previous best, set in 1989. Little surprise, then, that a widely watched global stockmarket index recently hit an all-time high, too (see chart 1).

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This article appeared in the Finance & economics section of the print edition under the headline “Problems on the horizon”

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