US stocks: Wall Street ends down, calls for AI slowdown pummel chipmakers
All three major indices closed lower on Monday
Wall Street closed lower on Monday (Sep 14) as losses in Nvidia and other chipmakers weighed down the market. Top executives from major US artificial intelligence companies expressed safety concerns and called for a slowdown in AI development. Investors were concerned about the possibility of a rate hike by the Federal Reserve, with the 10-year Treasury yield briefly surpassing 5 per cent for the first time since 2023.
AI-linked stocks plummeted worldwide following warnings from leaders of Anthropic, OpenAI, and xAI about risks from rapid AI development. Shares of prominent chipmakers like Nvidia, Broadcom, Micron Technology, and Advanced Micro Devices declined, with the PHLX chip index falling sharply. Brent crude futures increased slightly as energy supply concerns mounted due to new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East.
Inflation, high corporate and government borrowing, and worries about the long-term fiscal position of the US have driven up US Treasury yields in recent months. The 10-year yield reaching 5 per cent is a significant threshold that could impact the stock market and potentially prompt the Federal Reserve to raise interest rates more than once.
The S&P 500 lost 0.48 per cent, the Nasdaq Composite dropped 0.55 per cent, and the Dow Jones Industrial Average fell 0.29 per cent. ServiceNow, Adobe, and Workday experienced gains as software stocks faced pressure from potential AI competition. Bank of America's stock dipped after CEO Brian Moynihan anticipated a 10 per cent decrease in investment banking fees for the third quarter.
The S&P 500's recent decline has reduced its valuation to 19 times expected earnings, marking its lowest level since April 2025.
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