Stock Market Madness

August 25th, 2025
Ruhaan Sood

Graph courtesy of Datastream

Leonardo Dicaprio's “The Wolf of Wall Street” paints an interesting perception of the US Stock Market. While there isn’t proliferant drug usage and fraud (most of the time), his character Jordan Belfort does make one accurate statement:

“No one knows if the stock is going to go up, down, or all around sideways.”

In 2025, more than a decade after this movie was created, that couldn’t be closer to the truth. Recently, it seems that although preceded with recent gains in both chip sector and insurance (specifically Apple and United Healthcare Group), the AI bubble may soon burst. A stock market "bubble," a period of inflated asset prices driven by speculation and market hype rather than the intrinsic value of the asset, often results in a rapid fall, or "burst," leading to a stock market crash.

When brand new AI technologies are announced—especially by companies such as NVIDIA and Intel, which have seen their largest buy-out growth in years—the tech industry tends to see massive stock market gains. NVIDIA's innovations in graphics, learning systems, and overall microcomputers kept the market prospering long enough for significant growth. Now, they stand as the most “top-heavy” company on the New York Stock Exchange (NYSE). Startups companies, similarly, were able to gain massive capital and investment, based on the promise of artificial learning gains and large return on investment. Yet, over 95% of companies or backers pledging money in AI have yet to see any concrete financial gain.

Additionally, such “euphoric” signage of an AI boom is starting to die down, leaving investors with millions in the market without any publicity to grow their investments. Even in more civilian applications, companies like Google, Microsoft, and ChatGPT have solidified their market with products like Gemini and CoPilot, leaving smaller companies and their offerings to dwindle in comparison to American Big Tech. The tech portion of the stock market is now 37%, surpassing the dot-com era in the early 2000s and marking a new age for world economics.

Albert Edwards—global strategist and economist—warns of a tech stock bubble, especially as valuations peak to an all time high. Historically, the stock market has depended on such high valuations as a cash-grab offer, inspiring others to also similarly invest. But, if too much investment occurs with high yield returns, the market will crash and burst the bubble that economists have predicted.

In the future, companies should be wary of immediately buying into high yield rate chip industries. NVIDIA's second quarterly performance is due Wednesday, August 27th. Until then, it’s likely the tech sector market will flourish and either plateau or rise based on these results.

Extemp Analysis by: Ruhaan Sood

Question: Is current U.S. economic policy boosting or burdening the stock market?

AGD: Since this question is centered around big economic moves rather than personal affliction, I’d focus on a more broad hook rather than a personal narrative. In this case, I’d pull out a fun tidbit about uncanny governmental involvement in the stock market. Research some funny cases between U.S. agencies and the stock market, both domestically and internationally.

Answer: Based on current readouts from analyzing multiple forecasts of market rates, I’d likely answer Yes, current government policy is burdening the stock market due to unneeded overreach or similarly worded due to significant governmental pressure.

3 Points

Excessive oversight on the Federal Reserve
Large economic buyouts with big tech
Unkept promises of Artificial Intelligence investment

Analysis: Focus on discrete economic policy made by the Trump administration. Do your best to use concrete examples of such movements made by the government and how they are worsening the stock market environments. I’d focus on using a cause-effect impact substructure to best characterize examples and how they play relative to your answer.

Concluding Thoughts: The outlook on the U.S. economy is changing 24/7, even more so on the stock market. Stay updated constantly to ensure you don’t say what was once true. Stick to the prompt and stick to your examples for growth and ground. Happy extemping!