The ECB said in a Monday blog that excessive optimism in US technology stocks linked to AI may be vulnerable to a market correction. Valuations of large tech firms are well above historical averages, and overly optimistic sentiment can amplify price falls beyond what rational scenarios would suggest. With fiscal and monetary policy buffers limited, any correction could cause broader market and economic spillovers that policymakers may find difficult to counter. The ECB added timing is unpredicta

The ECB said in a Monday blog that excessive optimism in US technology stocks linked to AI may be vulnerable to a market correction. Valuations of large tech firms are well above historical averages, and overly optimistic sentiment can amplify price falls beyond what rational scenarios would suggest. With fiscal and monetary policy buffers limited, any correction could cause broader market and economic spillovers that policymakers may find difficult to counter. The ECB added timing is unpredictable and such boom‑and‑bust patterns are typically identifiable only in hindsight.