As US stocks gradually recoup their July losses and edge closer to new record highs, researchers from the European Central Bank (ECB) issued a cautionary note via a blog post on its official website on Monday. They warned that US tech stocks might face another downturn as their valuations come under scrutiny. The current surge, fueled by artificial intelligence, displays historical patterns reminiscent of the dot-com bubble era. ECB researchers highlighted that even if current tech stock valuations appear justified, the broadening scope of AI applications could disseminate risks from individual firms to the entire economy. Consequently, investors seeking higher risk premiums might trigger a decline in stock prices. Simultaneously, an excessively optimistic market sentiment could propel valuations beyond levels warranted by underlying fundamentals. Should the US stock market undergo a substantial correction, the eurozone could feel the repercussions through two primary avenues: investors' direct holdings of US stocks and the resultant dampening of local market sentiment. These effects could potentially spill over into market confidence, credit conditions, and employment activities. Notably, policymakers now possess considerably less leeway to counteract market turbulence compared to the dot-com bubble period.