AI Warnings Trigger Nasdaq Selloff as Tech Stocks Slide

U.S. stock futures fell sharply on Monday, led by the Nasdaq 100, as major technology and semiconductor stocks came under pressure following calls from leading AI executives to slow the development of increasingly powerful artificial-intelligence systems. Nvidia fell more than 2% in premarket trading, while Amazon declined 1%. Nasdaq 100 E-minis were down 1.56%, compared with a 0.68% decline for S&P 500 E-minis and a 0.15% drop for Dow E-minis.

The selloff intensified across chipmakers, with Intel, AMD and Marvell Technology falling 5.5%, 5.1% and 7%, respectively. Anthropic CEO Dario Amodei recently urged AI companies to slow the pace of model development, while Elon Musk and OpenAI CEO Sam Altman expressed agreement with his concerns. The warnings have prompted investors to reassess the extraordinary optimism surrounding AI, which has driven significant gains in technology and semiconductor stocks in recent years. Meanwhile, software companies including ServiceNow, Adobe and Workday rose as investors saw potential benefits from concerns about AI disruption.

Market sentiment was further pressured by expectations of a possible U.S. Federal Reserve interest-rate hike later this week, with traders pricing in an approximately 89% probability of an increase. Concerns were also heightened by accelerating U.S. inflation and rising oil prices, with Brent crude climbing 2.5% to $107.28 a barrel and West Texas Intermediate gaining 2.3% to $102.39. Some investors, however, questioned whether the AI safety warnings could also serve the interests of established companies seeking to limit competition from smaller rivals.

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