Jefferies, in its latest GREED & Fear note, has flagged growing concerns over the US stock market as AI-driven capital expenditure surges reach unprecedented levels. The brokerage noted that retail investors and passive investment strategies are fueling an extreme AI capex mania, even as the long end of the Treasury bond market remains unusually calm and the US dollar weakens. The US dollar index has fallen 9.8 per cent year-to-date, marking its worst performance since 2017. Advertisement

“All this is unfolding as financial markets enter October, historically a month prone to crashes. Yet the recommencement of Federal Reserve easing has emboldened bulls, with talk of ‘melt-up’ scenarios and rising FOMO sentiment,” Jefferies said.

Since bottoming in early April, the S&P500’s market capit

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