To date, 2025 has been a yr of appreciable inventory market whiplash, with the S&P 500 sinking 10% in two days in early April on the heels of President Donald Trump’s tariff bulletins, solely to achieve certainly one of its greatest days in historical past just a few days later, when the president stated he’d pause stated tariffs.
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To attempt to get a deal with on how the market would possibly carry out for the remainder of the yr, GOBankingRates requested Grok, the Elon Musk-backed synthetic intelligence (AI) chatbot, for some solutions about whether or not a market crash is on the horizon. Right here’s what it stated.
Additionally see find out how to shield your cash from a inventory market crash at all ages.
The AI assistant known as predicting how the inventory market will carry out within the second half of 2025 “inherently unsure,” pointing to financial, political and international volatility as a purpose it couldn’t commit a technique or one other. As an alternative, it supplied arguments for why the inventory market would possibly transfer in both path.
Right here’s what it needed to say about why the market might fall.
Quoting evaluation by EBC Monetary Group, Grok famous that the Shiller CAPE ratio — the metric utilized by monetary specialists to find out whether or not markets are undervalued or overvalued — for U.S. equities is within the excessive 30s.
In accordance with EBC, that degree is traditionally related to decrease ahead returns. The outcome might be a market correction.
Pointing to weakened shopper spending, a cooling labor market and the potential of a commerce conflict, Grok famous there’s potential for a recession that may halt a market rally.
Whereas Grok cited outdated information from December 2024, Fitch Rankings’ August 2025 evaluation confirms that shopper spending was down within the first half of the yr. It additionally cited commerce uncertainty and a cooling labor market.
Grok pointed to the uncertainty of the Federal Reserve’s financial coverage, significantly round rates of interest, as a possible trigger for inventory market underperformance — particularly if the Fed refuses to chop charges, which it says might put stress on equities.
Nonetheless, Fed Chair Jerome Powell has hinted at doable charge cuts, CNN reported.
Noting that tech corporations like Nvidia have an outsize proportion of the worth of the present S&P 500 — Nvidia alone accounts for almost 7% of the S&P’s complete worth as of Sept. 5 — Grok stated the market might undergo if the AI-driven rally begins to lose momentum.
