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Investing.com - The U.S. stock market is currently facing the risk of a serious fall, with a sharp correction potentially coming in the next six months to two years, according to JPMorgan Chase CEO Jamie Dimon.
Speaking in an interview with the BBC, Dimon said he was "far more worried than others" about a slide in equities on Wall Street, warning of "a lot of things out there" which are creating an atmosphere of uncertainty.
These included risks from geopolitical tensions, fiscal positions, and global remilitarization, all of which Dimon suggested were the cause of "a lot of issues that we don’t know how to answer."
He also flagged that some investments now being poured into artificial intelligence would "probably be lost." AI has been one of the main drivers of stock market returns this year, underpinning gains in mega-cap tech firms exposed to the nascent technology in particular.
But a bout of perceived circular dealmaking in the AI industry has raised eyebrows among many investors and fueled comparisons to the dotcom boom and bust in the late 1990s. The Bank of England referenced this connection earlier this week, saying the value of AI firms now appears to be "stretched" and are at risk of a "sharp correction."
But Dimon told the BBC that he believes "AI in total will pay off."
U.S. stock futures searched for direction on Thursday, as investors assessed the AI-powered rally in tech shares and poured through minutes from the Federal Reserve’s most recent meeting. In the prior session, the benchmark S&P 500 and tech-heavy Nasdaq gained, logging new all-time closing peaks.
Separately, Dimon highlighted risks from pressure placed on the independence of the Fed. Although U.S. President Donald Trump has repeatedly badgered the central bank and its Chair Jerome Powell to quickly and aggressive lower interest rates to help boost the economy, Dimon said he was willing to take Trump "at his word" that he would not interfere with the Fed’s ability to make monetary policy decisions free from political influence. Dimon added that the independence of the Fed was important.