Wall Street consensus trading fails, AI panic triggers market fluctuations

ChainCatcher reports that, according to Bloomberg, by 2026, Wall Street investors will generally hold record-low cash reserves and minimize hedging, but after six weeks, multiple consensus trades have already failed.

AI has shifted from “sure-win” trades to a market threat, not to the companies developing AI, but to light-asset businesses that could be replaced by AI, such as software firms, wealth managers, and tax consultants. Market volatility is intensifying, and asset correlations are increasing. Energy, consumer staples, and government bonds, which were not favored earlier in the year, are now leading the market. A Bank of America survey shows that investor cash holdings have hit a record low of 3.2%, and nearly half of fund managers have no downside protection measures. Analysts warn that beneath the surface of market calm, there is significant pressure that could trigger more volatility shocks.