Nasdaq AI Bubble Explained Through Japan's Yen Carry Trade

Nasdaq AI bubble fears are colliding with yen carry trade risk, as leverage built on cheap Japanese rates can magnify any tech selloff. James Stanley, StoneX Media Senior Market Analyst, explains how crude oil, Big Tech earnings and the yen carry trade connect across markets. The last major carry unwind, from July to August 2024, saw the Nikkei fall more than 27% and the Nasdaq drop about 17% in roughly three weeks, even after a softer U.S. CPI report confirmed hopes for a Federal Reserve rate cut. Heavy selling in Amazon, Intel and Google after earnings has revived claims that the AI bubble has popped, although a bubble can only be confirmed once it has burst. Crude oil carries extra weight ahead of the U.S. midterm elections because oil prices are a leverage point for both sides of the Iran military operation. Treasury yields matter because a major rally in Treasuries, the trigger for a true fear trade in stocks, would need recessionary signals that have yet to appear. 00:00 - Oil Becomes the Midterm Lever 01:23 - AI Bubble Fears Hit Big Tech 02:30 - Crude Holds as Nasdaq Cracks 05:25 - Tech Leverage Meets Yen Carry 07:12 - The 2024 Nikkei, Nasdaq Unwind 11:12 - S&P 500 Stuck in a Range 12:21 - Fear Trade Waits on Treasuries 13:35 - Bubbles Only Show Once Burst Discover Actionable Insights with the latest Market Outlook Reports: https://intel.stonex.com/offer?language=en&campaignId=A908C315-DC62-4F35-AC16-870BB71E84D1&utm_source=youtube&utm_medium=social&utm_campaign=sxtv_guest_james_stanley&utm_content=share Like and subscribe for more financial market insights. #Nasdaq #StoneX #JamesStanley #CarryTrade --------- Like this video? Subscribe and turn on notifications so you don't miss any videos from StoneX: https://www.youtube.com/@stonex_official Visit https://www.stonex.com/en/insights/thought-leadership/?utm_source=youtube&utm_medium=social for insights, perspectives and thought leadership from StoneX's global network of experts. Visit our website: https://www.stonex.com?utm_source=youtube&utm_medium=social