Two of the FTSE 100’s most tech-focused funds, Polar Capital Technology Trust PLC (LSE:PCT) and Scottish Mortgage Investment Trust PLC (LSE:SMT), both took a hit on Wednesday amid an AI valuation storm brewing in the US.
On Wall Street overnight the mood turned sour: the Nasdaq Composite slid roughly 2%, shedding nearly 500 points, while the S&P 500 dropped around 1.2%.
Tech stocks took the brunt, among them big names like Palantir Technologies, which fell close to 8 %, despite what looked like solid results.
Why the sell-off? Investors are eyeing signs that the AI boom may have raced ahead of itself. Valuations have become stretched, and some voices are already warning of a possible bubble about to pop.
Now, Polar Capital and Scottish Mortgage aren’t just macro-names; they’re deeply exposed to Silicon Valley-style tech and early-stage AI plays. That means when US tech sneezes, these trusts start coughing too. And today they’re coughing loud.
Polar was off 1.8%, while Scottish Mortgage fared a little better with a 1.4% decline.