US stocks: Wall Street ends down, calls for AI slowdown pummel chipmakers

WALL Street ended down on Monday (Sep 14), 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.

Investors were also jittery after the benchmark 10-year Treasury yield briefly surpassed 5 per cent for the first time since 2023 ahead of this week’s Federal Reserve meeting. The US central bank is widely expected to raise interest rates.

AI-linked stocks plunged worldwide after the leaders of Anthropic, OpenAI and xAI warned of risks from rapid development, the starkest threat yet to the billions of dollars being poured into the industry that have driven markets to record highs.

Shares of Nvidia, Broadcom, Micron Technology and Advanced Micro Devices declined, and the PHLX chip index fell sharply.

Brent crude futures settled 1 per cent higher at US$105.68 per barrel as worries about energy supplies mounted following new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East.

High inflation, heavy corporate and government borrowing and concerns about the long-term US fiscal trajectory have sent US Treasury yields higher in the past month.

The 5 per cent mark that the 10-year yield hit on Monday is a threshold that analysts warned could ripple through the US economy and threaten the bull market in stocks by denting the relative appeal of US equities.

Traders are pricing in a 90 per cent chance that the Fed will raise interest rates by 25 basis points at its policy meeting on Wednesday to fight inflation related to high oil prices, according to CME’s FedWatch.

“The 10-year going above 5 per cent is huge and speaks volumes, and it may pressure the Fed to do more than just one rate hike,” said Jake Dollarhide, CEO of Longbow Asset Management.

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European shares slip on AI slowdown calls and inflation concerns

According to preliminary data, the S&P 500 lost 36.93 points, or 0.48 per cent, to end at 7,620.05 points, while the Nasdaq Composite lost 145.25 points, or 0.55 per cent, to 26,187.79. The Dow Jones Industrial Average fell 151.66 points, or 0.29 per cent, to 52,421.63.

ServiceNow, Adobe and Workday rallied. Those and other software stocks have sold off in recent sessions over worries that competition from AI companies could hurt their margins.

Bank of America dipped after CEO Brian Moynihan said he expects investment banking fees to drop by at least 10 per cent in the third quarter.

The S&P 500’s recent decline, coupled with a strong earnings outlook, has the benchmark trading at 19 times expected earnings. That is its cheapest since April 2025, when US President Donald Trump’s “Liberation Day” tariff announcements threw global markets into a tailspin. REUTERS