AI Now the “Lynchpin” Holding Up Stocks, Warns Tom Essaye
Sevens Report’s Tom Essaye cautions that AI enthusiasm is masking deeper market risks from tariffs, a cooling labor market, and government dysfunction.
‘AI is becoming a larger and larger lynchpin’ for stock market, analyst warns
Tom Essaye, founder of Sevens Report Research, warns that the stock market could face a “horror-movie scenario” if three key risks hit at once — an AI bubble burst, worsening consumer strain, and a weakening labor market. He points to OpenAI’s $500 billion valuation and stretched tech prices as signs of speculative excess. Meanwhile, rising delinquencies at companies like CarMax show lower-income consumers are increasingly pressured.
Essaye cautions that while the economy still looks stable on the surface, markets are ignoring the potential for rising unemployment and slowing growth. If AI optimism fades and consumer spending weakens, the S&P 500 could fall 20–30%, mirroring the drawn-out collapse of the early 2000s tech bubble.
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