Story perspectives

AI Bubble Burst Could Slash S&P 500, U.S. Growth

6/7/2026

Summary

Bloomberg Warns AI

Bloomberg Economics says an AI valuation bubble burst could cut the S&P 500 by 20%.
The model predicts the crash would erase over $1 trillion from global GDP, shrinking output by about 1.3% (?$1.6 trillion).
Bloomberg projects U.S. 2027 GDP growth falling from roughly 2% to 0.4% with a two-quarter contraction and expects the Federal Reserve to cut rates three or four times.

Summary

Tech Giants Austerity

Technology giants have entered austerity mode, cancelling contracts for equipment, concrete, cables and cooling systems.
The freeze on new data-center construction halts further AI-related infrastructure investment.
Firms are sharply curtailing hiring programs for engineers as budgets tighten.
High Federal Reserve interest rates and Middle East inflation are contributing to stagflation.
A 30% stock-market correction would make consumers feel poorer, pushing retail sales into negative territory.

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Bloomberg Warns AI

Bloomberg Economics says an AI valuation bubble burst could cut the S&P 500 by 20%.
The model predicts the crash would erase over $1 trillion from global GDP, shrinking output by about 1.3% (?$1.6 trillion).
Bloomberg projects U.S. 2027 GDP growth falling from roughly 2% to 0.4% with a two-quarter contraction and expects the Federal Reserve to cut rates three or four times.

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