Wall Street’s main indexes opened lower on Monday as a selloff in major AI and semiconductor stocks added to pressure on US equities.
The decline followed calls from senior artificial intelligence executives for a slower pace of AI development amid growing safety concerns.
The Dow Jones Industrial Average declined 153 points. The S&P 500 fell 0.74% while the Nasdaq Composite dropped 1.22%.
Nvidia shares fell about 3.8% in trading, while Amazon declined around 1.32%.
Other major chipmakers also came under pressure, with Broadcom, AMD, Intel and Marvell Technology falling between 4% and 8.8%.
AI stocks retreat as executives call for slower development
The latest pressure on AI stocks followed comments from Anthropic CEO Dario Amodei, who called for AI companies to slow the pace at which they advance the capabilities of their most powerful models.
OpenAI CEO Sam Altman and xAI chief Elon Musk backed the proposal. Amodei has also raised concerns about the potential risks associated with increasingly capable AI systems.
The developments have prompted investors to reassess some of the enthusiasm that has driven a major rally in AI-related technology and semiconductor stocks.
Billions of dollars have flowed into AI infrastructure and development in recent years, supporting strong gains across parts of the technology sector.
A slower pace of AI development could potentially reduce the need for heavy investment in the technology, creating a risk for companies that have benefited from the rapid expansion of AI spending.
However, the impact was not uniform across technology stocks.
Software companies that have faced concerns over AI disruption moved higher in trading. ServiceNow rose 5.6%, while Adobe and Workday gained 3.8% and 4% respectively.
Meta advanced more than 1% and Alphabet climbed 1.4%.
Some investors also questioned whether the AI-related decline would prove lasting, given the lack of clarity over how any slowdown in development would be implemented.
Oil prices add to pressure ahead of Fed meeting
Rising oil prices added another source of uncertainty for investors.
Brent crude futures climbed more than 4% to $109 a barrel, while West Texas Intermediate crude futures gained about 3% to $103.98.
Oil prices rose after Saudi Arabia shut a key pipeline that bypasses the Strait of Hormuz.
US crude had already moved above $100 a barrel last week for the first time since May amid an escalation of conflict in the Middle East.
The latest increase in energy prices comes after oil weighed on US equities last week.
The Dow fell 1.6% for its biggest weekly decline since March, while the S&P 500 and Nasdaq Composite lost about 0.8% and 0.7%, respectively.
Investors are also preparing for the Federal Reserve’s September policy meeting later this week.
Fed funds futures were pricing an approximately 88% to 89% probability of a rate hike, according to CME’s FedWatch tool.
The rate outlook has become more significant after data last week showed accelerating US inflation, while higher oil prices could add to inflationary pressures and complicate the central bank’s policy decisions.