AI fatigue: Citi cuts U.S. and tech to neutral, turns bullish on Europe Sam Boughedda Mon, November 9, 2026 at 7:10 AM EST 2 min read C +1.57% ^IXIC +1.09% IXIC Trade C on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Investing.com -- Citi tactically downgraded U.S. equities, global tech and European tech to Neutral from Overweight, citing the risk that investor positioning could fall further. The bank upgraded European stocks outside the U.K. to Overweight.
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Citi said global equities have tumbled in recent days after a rare period in which indexes held steady while money rotated sharply between sectors. Tech has been hit hardest, but volatility has become broad-based.
"We remain constructive on AI over the medium-term but would look for cleaner positioning and more stable AI sentiment (along with steady EPS revisions) before reestablishing our Overweight call," the bank wrote.
Citi warned that positioning in the Nasdaq could slip from roughly neutral into net-short territory, meaning more investors betting on declines. It estimates another 5% drop would be needed for positioning to turn properly negative.
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The bank said AI sentiment has plunged, partly because the midterm results raised questions about the long-term trajectory of AI spending.
They added that credit spreads have also widened and earnings revisions have slowed. However, on the positive side, oil prices and bond yields have fallen, and economic data remains resilient.
"The investing environment remains tenuous, but risks appear balanced, rather than significantly skewed to the downside," Citi said.
It expects global earnings growth to slow by about 20 percentage points in 2027. In similar years, global stocks have risen about 4% on average, with defensive and high-quality stocks outperforming.
Citi upgraded Europe ex-U.K. because the region is less exposed to tech and benefits more from falling oil prices. Its sector strategy is now a mix of cyclical and defensive stocks, with Overweight ratings on materials and health care. In Europe, it also upgraded food and beverage to Overweight.
AI fatigue: Citi cuts U.S. and tech to neutral, turns bullish on Europe
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