May's surge was too strong; taking a breather is normal. The key is that the Federal Reserve and inflation variables haven't stabilized yet, so the volatility of tech stocks probably won't decrease.

Vasu Menon, Strategy Director at the Overseas Chinese Banking, said that the long-term outlook for AI remains positive, but the pullback in technology stocks shows that after gains, volatility still persists. With May’s rally having been too large, a healthy correction is reasonable; in the short term, investors should remain cautious, as uncertainty surrounding inflation, rising U.S. Treasury yields, and the Federal Reserve’s policy direction under Wash has an impact. In addition, SpaceX and Anthropic are moving ahead with IPOs at high valuations, raising short-term concerns and prompting the market to question whether high premiums and mega IPOs will divert liquidity away from other technology sectors. Looking ahead long term, these listings will further strengthen AI’s position as a core investment theme.