The markets are in turmoil as 'Big Short' investor Michael Burry places a massive $1.1 billion bet against AI stocks, sending shockwaves through the tech industry. With the Nasdaq 100 futures pointing downward, a global sell-off of tech stocks is underway, and the impact is being felt across Asia and Europe. The STOXX Europe 600, Japan's Nikkei 225, and South Korea's KOSPI are all experiencing significant declines. Bitcoin's value has also taken a hit, dropping below $100K before recovering slightly. This sell-off comes as no surprise, given the tech sector's dominance in the S&P 500's performance, with tech stocks contributing over 90% of the index's total return in October. The 'Magnificent 7' stocks, in particular, have been driving the S&P's performance, but they are now facing a brutal backlash. Asian markets are not immune to this trend, with a small group of tech companies dominating the indices. Hong Kong's Hang Seng, for instance, is heavily influenced by just six tech stocks, while Korea's index is driven by a mere two stocks. This narrow focus on a few tech giants has raised concerns among Wall Street analysts, who are now questioning whether the market is due for a significant correction, similar to the one predicted by Goldman Sachs and Morgan Stanley's CEOs. The situation has become even more dramatic with the revelation that Michael Burry's hedge fund, Scion Asset Management, has a short bet worth $1.1 billion against Nvidia and Palantir. This move has sparked outrage from Palantir's CEO, Alex Karp, who believes it is absurd to short chips and ontology when these companies are thriving. The markets' volatility and the potential impact of Burry's bet have left investors on edge, with many wondering if the tech sector's recent boom is finally coming to an end.
