What caused the $285 billion stock market sell-off?

A new AI automation tool released by Anthropic PBC on Tuesday is believed to have triggered the $285 billion stock market sell-off.

Which sectors were most affected by the AI tool's release?

The software, financial services, and asset management sectors were heavily impacted by the sell-off.

How did Asian markets react to the AI disruption fears?

Asian software stocks also slid significantly, with prominent Indian IT companies experiencing notable declines in their share prices.

Home / Business and Economy / AI Tool Sparks $285 Billion Stock Market Plunge

AI Tool Sparks $285 Billion Stock Market Plunge

5 Feb

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Summary

New AI tool from Anthropic caused a $285 billion stock market decline.
Software, financial services, and asset management sectors were heavily impacted.
Asian software stocks also slid, with Indian IT companies affected.

A significant market downturn occurred on Tuesday, with a new AI automation tool from Anthropic PBC causing a $285 billion rout across software, financial services, and asset management stocks. Investors reacted swiftly, dumping shares with even slight exposure to AI disruption fears.

The sell-off began before the US market opened, impacting major companies like Experian Plc and RELX PLC. Asian software stocks followed suit, with Indian IT companies such as Tata Consultancy Services Ltd. and Infosys Ltd. seeing sharp declines. This volatility underscores investor apprehension about AI's evolving impact on various industries.

Goldman Sachs' basket of US software stocks dropped 6%, and an index of financial services firms tumbled nearly 7%. The Nasdaq 100 Index also experienced a notable decline. The event illustrates a critical period for companies to navigate the AI landscape, distinguishing potential winners from those vulnerable to disruption.