AI Stocks Drop Worldwide

AI stocks slid worldwide on Monday after leaders of the industry warned a slowdown is needed for the safety of humanity. Another climb in oil prices, meanwhile, briefly sent the yield on the 10-year Treasury to 5% on Monday for the first time since 2023.

• The S&P 500 fell 37.00 points, or 0.5%, to 7,619.98.
• The Dow Jones Industrial Average fell 152.09 points, or 0.3%, to 52,421.20.
• The Nasdaq composite fell 146.62 points, or 0.6%, to 26,186.41.

Despite all the downers, gains for many stocks outside AI helped limit Wall Street's losses, the AP reports. Brent crude's price settled at $105.68 per barrel after nearing $110 in the morning.

AI stocks have been under pressure for 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 3.4% and was the heaviest weight on the market because of its massive size.

• SpaceX, which gets a chunk of its business from AI, slipped 2% 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 Saturday that OpenAI would likely wait until next year for a sale of its stock on Wall Street, potentially delaying a gusher of cash for Softbank and other early investors in OpenAI.

Helping to limit Wall Street's losses on Monday were several software companies that had tumbled earlier on worries AI-powered competitors would undercut their businesses. Intuit, the company behind TurboTax and QuickBooks, rose 5.5%. Autodesk, whose software helps designers, climbed 7.8%, and Adobe added 5.3%.

Oil prices, meanwhile, continued to climb as fighting in the Middle East keeps squeezing the global flow of oil. An important Saudi oil pipeline will be mostly out of service for weeks following an attack last week, two regional officials told the AP. 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.

• The jump in oil prices has sent 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.