Valu­ations of US tech stocks such as Nvidia, Alpha­bet, Microsoft and Meta have become “stretched” as investors are driven by “fears of miss­ing out”, the European Cent­ral Bank said yes­ter­day.

The warn­ing, in the cent­ral bank’s latest Fin­an­cial Sta­bil­ity Review, fol­lows sim­ilar cau­tions from insti­tu­tions includ­ing the IMF and the Bank of Eng­land over high valu­ations of arti­fi­cial intel­li­gence stocks. “Cur­rent mar­ket pri­cing does not appear to reflect per­sist­ently elev­ated vul­ner­ab­il­it­ies and uncer­tain­ties,” the ECB said.

Since the tem­por­ary sell-off in April over US Pres­id­ent Don­ald Trump’s trade tar­iffs, mar­kets had been driven by a “renewed risk-on sen­ti­ment” that had pushed “already high valu­ations even higher”, the ECB said in the review.

It added that investors were either hop­ing that “tail risks will not mater­i­al­ise” or were being driven by “fears of miss­ing out on a con­tin­ued rally”.