NEW YORK (AP) — Technology stocks are sliding worldwide Monday after leaders of the artificial-intelligence industry warned a slowdown is needed for safety, while another jump in oil prices is pressuring financial markets.
The S&P 500 fell 0.8% and was on track for its fifth loss in six days, even though more stocks rose within the index than fell. The Nasdaq composite, which has many more tech stocks, tumbled a market-leading 1.2%, while the Dow Jones
Industrial Average was down 158 points, or 0.3%, as of 9:35 a.m. Eastern time.
AI stocks have been under pressure a while because of worries their prices shot too high in the frenzy around the technology. The concerns jumped to another level over the weekend after one of the industry’s leading voices, Anthropic CEO Dario Amodei, called for a deliberate and global slowdown in the development of AI.
He cited safety issues, including the risk that AI becomes capable of leading a swarm of agents that could take over the entire internet within six to 12 months.
Nvidia, whose profits have soared because its chips are helping to train AI models, sank 3.9% and was the heaviest weight on the market because of its massive size.
SpaceX, which gets a chunk of its business from AI, fell 1.7% after Elon Musk said over the weekend that he agrees with Amodei. Softbank Group, the Japanese giant that is a major investor of OpenAI, lost 10.7% in Tokyo after OpenAI’s Sam Altman likewise supported the concept of a slowdown.
Altman also said in an interview with Fortune published on Saturday that OpenAI would likely wait until next year for a sale of its stock on Wall Street, potentially delaying a potential gusher of cash for Softbank and other early investors in OpenAI.
In South Korea, the Kospi index dropped 3.3% due to losses for its two most influential stocks, Samsung Electronics and SK Hynix.
It wasn’t just tech stocks. Other beneficiaries of the boom around AI likewise fell, such as companies in the power industry electrifying hungry data centers. GE Vernova sank 7.3%, and Constellation Energy Group dropped 3.5%.
President Donald Trump on Sunday played down the need for his administration to check the development of AI, saying he worried about ceding America’s edge over China in a global competition and that winning would help address the risks from the advancing technology.
All the while, another jump in oil prices continued to pressure the global economy.
The price for a barrel of Brent crude rose 3.9% to $108.73 and got as high as $109.80 in the morning as fighting in the Middle East keeps squeezing the global flow of oil.
An important Saudi oil pipeline will mostly be out of service for weeks following an attack last week, two regional officials told The Associated Press. The pipeline offered a way for Saudi Arabia to shift exports to the Red Sea and avoid the Persian Gulf’s Strait of Hormuz, where Iranian attacks have stifled the movement of oil tankers.
Brent has jumped from less than $72 in early July as doubts rise that the United States and Iran can come to an agreement that would allow oil tankers to freely exit the Persian Gulf through the strait again.
While the prospect of a de-escalation of war in Iran may have dimmed, ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Monday that the situation is still fluid and “sizable” volumes of oil have still been moving through the strait.
So far, the jump in oil prices has helped send the average cost of a gallon of regular gasoline across the country to nearly $4.32 from $4.08 a month ago and $3.18 a year ago, according to AAA.
Such upward pressure on inflation has much of Wall Street expecting the Federal Reserve will hike its main interest rate on Wednesday at the end of its next meeting.
That’s the traditional way the Fed tries to rein in high inflation. Such a move then filters out through the rest of the bond market, makes it more expensive for U.S. households and businesses to borrow money, slows the overall economy and undercuts prices for investments. That hopefully would remove some of inflation’s fuel, though Trump has been lobbying for lower interest rates instead of higher.
Besides high inflation, worries about rising debt for the U.S. and other governments have helped send longer-term Treasury yields to their highest levels in years.
The yield on the 10-year Treasury rose to 4.98% from 4.96% late Friday and just 3.97% before the war with Iran began in February.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
