On June 26, Patrick Munnelly, an analyst from Tickmill Group, highlighted in a report that the stock market propelled by artificial intelligence (AI) is experiencing escalating volatility. The significant presence of leveraged retail investors, the concentration of long positions in semiconductor stocks, and the fragile market sentiment surrounding the demand for memory chips have collectively rendered the market highly sensitive to adverse news. The abrupt downturn in Asian stock markets on Friday serves as a clear indicator that market sentiment can swiftly transition from optimistic to precarious.

Simultaneously, the mitigating impact of oil prices on inflation has diminished, and security concerns in the Strait of Hormuz have reemerged. While this does not signify the collapse of AI-driven trading, the crowded positioning suggests that, should the broader market trend reverse, it will be challenging to propel the market upwards, even with favorable fundamental news.