Wall Street ended lower as chip stocks came under heavy selling pressure after executives at major artificial intelligence companies raised concerns over the risks of rapid AI development and called for a slowdown.
The S&P 500 fell 0.48% to 7,619.94 points, while the Nasdaq Composite dropped 0.56% to 26,186.41. The Dow Jones Industrial Average declined 0.29% to 52,421.17.
Nvidia fell 3.4%, while Micron Technology dropped more than 5%. Broadcom and Advanced Micro Devices each lost more than 4%, sending the PHLX semiconductor index down 5.9%.
The selloff came after leaders from Anthropic, OpenAI and xAI warned about the risks of rapid AI development, raising fresh questions over the billions of dollars being invested in the sector.
Investors were also cautious ahead of the Federal Reserve’s policy meeting this week after the benchmark 10-year US Treasury yield briefly climbed above 5%, its highest level since 2023.
Markets are pricing in a 90% chance of a 25-basis-point Fed rate hike on Wednesday, according to CME’s FedWatch, as higher oil prices raise concerns over inflation.
Brent crude settled 1% higher at US$105.68 a barrel following fresh strikes on Saudi energy infrastructure and attacks on shipping in the Middle East.
Higher Treasury yields have added to pressure on equities, with concerns over inflation, heavy borrowing and the US fiscal outlook raising questions over the sustainability of the stock market rally.
Information technology was the weakest-performing S&P 500 sector, falling 1.68%, while industrials declined 1.44%.
Meanwhile, some software stocks moved higher, with ServiceNow, Adobe and Workday gaining between 4% and 7.4% after recent declines driven by concerns that competition from AI companies could pressure their margins.Nvidia Leads Wall Street Lower On AI Slowdown Fears
Reuters
