Citi Downgrades US Stocks To Neutral Amid AI Sell Off

Citigroup strategists downgraded US stocks to <b>neutral</b> from overweight on Monday. This move follows a sharp sell-off driven by concerns over surging AI spending and tighter regulation. The bank seeks cleaner investor positioning and more stable sentiment in the market. The recent volatility erased about <b>$3 trillion</b> from the market value of S&P 500 companies. Strategists led by <b>Beata Manthey</b> warned that positioning on key indices like the Nasdaq could reset lower into net-short territory. Citi also cut ratings on global and European technology sectors to neutral. Democrat victories in recent US midterm elections raised fears of stricter regulations slowing AI infrastructure buildout Citi upgraded European equities excluding the UK and raised global healthcare stocks to overweight.