The U.S. economic research firm highlighted in a recent report by investment expert Peter Grandić that artificial intelligence (AI) and political tensions in the Middle East could have negative impacts on the stock market. He noted how AI technology is rapidly evolving, causing some large corporates and small-medium enterprises to be suppressed, thereby increasing the likelihood of volatility across the market.
Grandić stated in an interview with David Lynn on October 25 that “the current downturn in the U.S. stock market is due to two axes: AI and Middle East tensions.” He noted that while AI-related stocks were weakening, U.S. debt was rising at the same time, indicating a dual shift. He pointed out that the S&P500 index had more low‑performing names, and that companies that fell 10%–40% from their highs were rapidly increasing in number. Accordingly, he urged investors to reassess strategic positions.
Emphasizing that Middle East conflict and its related costs could burden the market, he warned that if the conflict lengthened it might lead to price inflation, lowering the profitability of energy‑related industries and other sectors. He noted that with U.S. debt at $40 trillion and annual spending exceeding $2–3 trillion, such uncertainties would make corporate financing and operations even more difficult.
He highlighted how small firms were being suppressed and said “our group manages about $2 billion in business but half of our clients are small‑to‑medium U.S. corporates; they face costs, regulatory, legal issues that complicate their operations.” He warned that if political tensions after a ceasefire deepened, major issue resolution would be delayed. While acknowledging the attractiveness of new energy investments, he cautioned that it is risky to enter into the later part of the current upward trend.
Grandić’s warning points that the U.S. stock market faces both AI and Middle East tension axes, potentially increasing long‑term volatility. Investors should recognize these risks and reassess portfolios.