After the AI sell-off
The day after our Investment Committee met, the AI trade broke, led by the companies that supply the AI build-out. We advise caution: the pattern increasingly resembles the end of the 1990s bubble.
The 5 November sell-off
Source: publicly available market data. Price returns in USD, close of 5 November 2026.
What happened
Credit markets gave the first warning: since early October, spreads on data centre debt have widened sharply. The midterm result was the final blow, as Texas, home to about 27% of planned US data centre capacity, now faces a moratorium on new data centres. Treasuries, investment grade credit, defensive sectors and Europe held up far better.
What we wrote in October “Gains rest on a handful of very large companies and on passive flows. A reversal of those flows could cause a fast drawdown.” Market Outlook: October 2026 →Why we advise caution
Falls inside a healthy economy hit by a policy shock (1998, 2025) were bought; falls inside a bursting bubble or a credit crisis (2000, 2008) were not. Today the stress sits where it sat in 2000: in the debt that finances the build-out.
| Day | Fall | 3 months later | 1 year later |
|---|---|---|---|
| 31 Aug 1998, Russian default | −9.9% | +36.6% | +110.2% |
| 14 Apr 2000, dot-com bubble | −9.8% | +26.7% | −47.9% |
| 29 Sep 2008, financial crisis | −10.5% | −21.6% | +14.8% |
| 4 Apr 2025, tariffs | −6.1% | +30.5% | +43.1% |
| 5 Nov 2026 | −6.4% | … | … |
Source: GYRA SA, computed from Nasdaq 100 daily closes. Price returns in USD from the close on the day of the fall; three months is 63 sessions, one year 252. Past performance is not indicative of future results.
In 2000 the market rebounded almost 27% in three months before losing nearly half its value: a sharp bounce would not mean the risk has passed.
Our view in brief
| Asset class | Our view |
|---|---|
| US equities | Cautious: concentration and AI financing risks |
| Government bonds | Constructive: US yields have likely peaked |
| Emerging market debt | Selective: spreads are at record tights |
| Chinese and Asian equities | Constructive on platforms, cautious on AI hardware |
| European equities | Neutral: range bound, more resilient than the US |
| Gold and precious metals | Constructive: prices may have bottomed |
| Oil | Upside risk from attacks on shipping |
| Private credit | Cautious: the largest hidden risk we see |
| Cash and liquidity | Overweight: a tactical reserve to protect and to buy into sell-offs |
Source: GYRA SA Investment Committee, 5 November 2026, updated 6 November 2026. Views, not forecasts or guarantees.
Staying quietly in a room
“All the unhappiness of men comes from a single thing: not knowing how to stay quietly in a room.”
Blaise Pascal, Pensées
Markets are no different. Often the hardest and most valuable thing is to wait, with liquidity in hand, until prices make sense. This is how we manage money at GYRA:
- Cash is a position. We raise it tactically when risk builds, and use it when others are forced to sell.
- Protection where mandates allow. Hedges such as inverse ETFs and options gain in a drawdown and free up liquidity when it matters most.
- Value and quality over the crowded trade. We own companies for what they earn, not for the story around them.
- Selective, not reactive. Markets exaggerate in both directions. We buy good companies sold too hard, one at a time.
Sources: publicly available market data; GYRA SA calculations from Nasdaq 100 daily closes, as of 5 November 2026. Views of the GYRA Investment Committee of 5 November 2026, updated 6 November 2026. Forward-looking statements are based on current assumptions and are subject to change without notice. This article is provided for information purposes only. It does not constitute investment, legal or tax advice, an offer, or a recommendation to buy or sell any financial instrument or to adopt any strategy, and it is not directed at any person in any jurisdiction where its publication would be contrary to local law. Past performance is not indicative of future results. Data sourced from third parties is believed to be reliable but has not been independently verified by GYRA SA.