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US Stocks Fall as AI Concerns Grow and Oil Rises
US stocks lost value on Monday.
Investors were worried that companies might slow down artificial intelligence development because of safety concerns.
Some technology leaders supported slowing the development of the most advanced AI models.
This made investors less confident about how quickly AI companies might grow.
Oil prices also rose after Saudi Arabia shut an important pipeline.
More expensive oil can increase pressure on businesses and consumers.
The interest rate decision from the Federal Reserve is also expected this week.
The 10-year US Treasury yield reached 5%, which can affect borrowing costs.
Traders were pricing in a high chance of a rate hike.
The S&P 500 fell 0.6%, the Nasdaq Composite dropped 0.9%, and the Dow declined 160 points, or 0.3%.
AI-linked stocks weakened after Anthropic CEO Dario Amodei called for slower development of advanced AI models because of safety risks.
Nvidia and Broadcom each fell 3%, while Advanced Micro Devices and Intel dropped 5% and Marvell Technology declined 6%.
Oil prices rose after Saudi Arabia shut a key pipeline bypassing the Strait of Hormuz, with WTI above $103 and Brent above $109 per barrel.
The 10-year US Treasury yield rose above 5%, while investors awaited the Federal Reserve’s policy decision and traders priced an approximately 88% chance of a rate hike.
- Who
- US investors, technology companies and leaders including Dario Amodei and Sam Altman, Saudi Arabia, and the Federal Reserve.
- What
- US stocks fell as AI slowdown concerns, rising oil prices and uncertainty over interest rates pressured markets.
- Where
- US financial markets; the oil-supply concern involved a pipeline bypassing the Strait of Hormuz.
- When
- Monday, ahead of the Federal Reserve’s policy meeting scheduled for this week.
- Why
- Investors reacted to calls for slower advanced-AI development, higher oil prices, and expectations surrounding a possible Federal Reserve rate hike.
Slower AI Development
Continued AI Development
Pace of advanced-model development
Slower AI Development
Dario Amodei argued that AI companies should slow development of their most advanced models because of safety risks.
Continued AI Development
The article reports that other technology figures backed the proposal, but it also notes concerns that slowing development could affect the AI sector’s growth prospects and heavy investment.
Key facts
- S&P 500
- Down 0.6% on Monday
- Nasdaq Composite
- Down 0.9% on Monday
- Dow Jones Industrial Average
- Down 160 points, or 0.3%
- 10-year US Treasury yield
- Rose above 5%, its highest level since October 2023
- West Texas Intermediate crude
- Up 3% to above $103 per barrel
- Brent crude
- Up 4.5% to above $109 per barrel
- Rate-hike probability
- Fed funds futures traders priced an approximately 88% chance of a hike
Sources
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