In a recent social media post, Bridgewater Fund founder Ray Dalio cautioned that the artificial intelligence (AI) boom, which had previously propelled tech stocks on Wall Street to new heights, is now showing early signs of entering a bubble phase. Dalio highlighted that by 2025, the performance of the U.S. stock market had notably underperformed compared to non-U.S. stock markets and gold assets. Consequently, investors were showing a greater preference for allocating their funds to non-U.S. stocks and bonds.

Dalio further emphasized that there exists considerable uncertainty surrounding the future trajectory of Federal Reserve policies and productivity growth rates. He suggested that the new Federal Reserve Chair, along with the Federal Open Market Committee, is highly likely to implement measures aimed at reducing both nominal and real interest rates. While such a move would provide support to asset prices, Dalio warned that it could also further inflate the existing bubble.