AI fever will carry bull market higher despite recession: veteran trader

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AI fever will carry the bull market higher even as the US tips into recession, veteran trader says

, which have jumped amid the AI hype sparked by ChatGPT. Though the S&P 500 is up 15% this year, large tech stocks with plans to capitalize on artificial intelligence have more than doubled since January, with Nvidia up 200% and Meta up 129% from the start of 2023.

"If the bulls are going to be defeated, you have to tell me how is it exactly you're going to break the fever that currently exists in mega-cap equities? Because every day it's saving the tape," Terranova said in an interview withon Thursday."The script is in place.

That upward momentum could carry on even in the face of recession, Terranova said, who was skeptical that the US would be able to stick a soft-landing. A downturn is foretold when looking at key recession indicators, he suggested, pointing to the inverted Treasury yield curve, which notched its"That's not a sign of growth in the economy," Terranova said."[Mega-cap tech] is the only place you can find growth.

He forecasted that the Fed would raise interest rates further in the second half of the year, but later pull back interest rates due to recession risks. "That does not mean that you wash away with an eraser the positive catalyst that is generative AI," he said of his view on stocks.

 

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