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AI Safety Fears Trigger Market Sell-Off
14 Sep
Summary
- AI leaders called for a slowdown in AI development due to safety concerns.
- Major tech stocks saw significant drops in premarket trading.
- Rising oil prices also contributed to market instability, with WTI crude above $103.
Global technology markets experienced a significant downturn as prominent AI leaders urged a slowdown in artificial intelligence development, citing safety concerns. Anthropic CEO Dario Amodei published an essay advocating for a pause on advancing powerful AI models, though he noted uncertainty about international participation, particularly from China. This call for caution rattled investor confidence, leading to a 2% drop in Nvidia stock during premarket trading on Monday. Shares of other major tech companies, including Broadcom, Intel, and Marvell Technology, also saw considerable declines, falling 3%, 5%, and 7%, respectively.
Broader market futures mirrored this unease, with Nasdaq-100 futures down 1.5%, S&P 500 futures off 0.6%, and Dow Jones Industrial Average futures shedding points. Asian markets, including South Korea's Kospi and Tokyo's Nikkei 225, retreated, and Europe's Stoxx 600 index saw a modest decline. Adding to the global market jitters were rising oil prices. WTI crude futures climbed 3% to trade above $103 a barrel, and Brent futures surpassed $108, following Saudi Arabia's decision to shut a critical oil pipeline after drone strikes. Last week also saw a surge in U.S. crude prices past the $100-per-barrel mark, which had previously pressured major stock indexes.
In contrast to the broader tech decline, energy stocks showed resilience. The U.K.'s FTSE 100 advanced, buoyed by BP and Shell. Meanwhile, anticipation built for the Federal Reserve's September policy meeting, with financial markets assigning an 86% probability to an interest rate increase.
