Wall Street ends down, calls for AI slowdown pummel chipmakers
NEW YORK: Wall Street ended down on Monday, weighed down by losses in Nvidia and other chipmakers after top executives in US artificial intelligence companies raised safety concerns and called for a slowdown in the development of AI.
Wall Street concluded lower on Monday as losses in Nvidia and other chipmakers impacted investor sentiment following top executives from major US artificial intelligence firms expressing safety concerns and advocating for a slowdown in AI development. Concerns about rapid AI advancement weighed heavily on global markets, with shares of Nvidia dropping 3.4%, Micron Technology falling over 5%, and Broadcom and Advanced Micro Devices each slipping more than 4%.
The PHLX chip index declined 5.9% and curtailed its 2026 gain to 57%. Brent crude futures rose 1% to US$105.68 per barrel due to worries over energy supplies stemming from new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East. High inflation, substantial corporate and government borrowing, and concerns over the long-term fiscal health of the US have driven up US Treasury yields, with the 10-year yield briefly surpassing 5% for the first time since 2023.
This milestone has raised concerns about the sustainability of the bull market in stocks and potentially led to multiple rate hikes by the Federal Reserve to combat inflation, particularly from rising oil prices. The S&P 500 ended the day at 7,619.94 points, down 0.48%, the Nasdaq fell 0.56% to 26,186.41 points, while the Dow Jones Industrial Average slipped 0.29% to 52,421.17 points.
Eight of the 11 S&P 500 sector indexes declined, with information technology and industrials leading the drop. Volume on US exchanges was notably high, with 15.3 billion shares traded, compared to the 14.8 billion average over the past 20 sessions. Despite the market's downturn, software stocks like ServiceNow, Adobe, and Workday rallied between 4% and 7.4%, reflecting ongoing competition from AI companies that could impact their margins.
Bank of America, however, declined 5.1% following CEO Brian Moynihan's warning that investment banking fees could drop by at least 10% in the third quarter. The S&P 500's recent decline, combined with robust earnings outlook, has brought the benchmark to a 19 times expected earnings ratio, marking its lowest since April 2025, during the period of President Donald Trump's tariff announcements, which caused global markets to enter a tailspin.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
