Investors bet on slower U.S. growth despite stronger third-quarter GDP
Investors are betting on slower U.S. growth despite third-quarter GDP expanding 3.4%, above the 3.2% market forecast, Financial News reported, citing the Financial Times. AI-related earnings concerns contributed: free cash flow at Meta Platforms, Alphabet and Amazon turned negative, and Goldman’s broad U.S. AI equity basket fell about 4.7% Friday, according to The Dark Side of the Boom.
More context
Financial markets are signaling slower U.S. growth despite stronger-than-expected economic data, as investors reassess the AI boom. The Financial Times reported that third-quarter GDP grew at a 3.4% rate, above the 3.2% market forecast, while the outlook for growth weakened. The report said Meta Platforms, Alphabet and Amazon each had negative quarterly free cash flow, and Intel’s disappointing earnings outlook weighed on semiconductor shares. Alphabet’s quarterly free cash flow has been negative only once before since its 2004 listing. During Friday’s technology selloff, Goldman Sachs’ broad U.S. AI equity basket fell about 4.7%, while the equal-weighted S&P 500 rose roughly 1.2%, according to The Dark Side of the Boom newsletter. BNY Investments chief economist Vincent Reinhart said growth relies too heavily on technology spending. PGIM chief U.S. economist Robert Sorkin warned that overheated economies often end in recession.
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Reporting
- The Financial News (South Korea) — Financial Markets Bet on U.S. Economic Slowdown ... Is AI the Culprit(?) - First-Class Business Newspaper Financial News
- thedarksideoftheboom.substack.com — The Great AI Rotation: Goldman Sachs Shows Wall Street's Old Economy Is Finding New Life
Verifier’s note
FN News reports investors shifting toward bonds as AI-related concerns weigh on growth expectations, explicitly attributing the report to the Financial Times. The Dark Side of the Boom on Substack separately describes investors rotating away from AI-linked stocks toward other sectors amid spending and return concerns.