AI Safety Concerns Weigh on Chip Stocks
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What market conditions set the stage for today’s financial news?
I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm. At Baird, our 5,000 plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets. Learn more at rwbaird.com slash WSJ.
Here's your closing bail brief for Monday, September 14th.
How are rising oil prices and inflation fears affecting U.S. stock indexes?
I'm Alexis Moore for The Wall Street Journal. Investors' fears about inflation are getting stronger as widening instability in the Middle East is pushing up oil prices. The 10-year U.S. Treasury yield briefly rose to a multi-year high above 5 percent before closing lower on the day. All three major U.S. stock indexes were down, with the Nasdaq losing 0.6 percent.
Why are CEOs of Anthropic, OpenAI, and SpaceX urging a slowdown in AI development?
The S&P 500 was down half a percent, and the Dow lost 0.3 percent. Concerns about AI safety have led to a rare consensus between the leaders of the world's biggest AI companies. The CEOs of Anthropic, OpenAI, and SpaceX are calling for a slowdown in AI development. And chip stocks are paying the price. Shares of NVIDIA dropped more than 3% today, while Marvell Technology lost more than 7%, and Intel dropped nearly 6%.
How is the AI‑safety slowdown impacting major chip makers like NVIDIA, Marvell, and Intel?
Investors are worried that slower AI progress means less demand for chips. Shares of Japanese tech conglomerate SoftBank also fell, losing more than 10% in Tokyo. A slowdown in AI development could affect the company's many AI investments, including its stake in OpenAI. On the other hand, software companies rallied. Earlier this year, investors bet that software businesses would be displaced by AI models. But after today, the stocks are under a bit less pressure. Shares of CrowdStrike ended 14% higher, and Workday was up 4.5%.
Why are software stocks such as CrowdStrike and Workday gaining while chip stocks fall?
Heads up, an artificial intelligence tool helped us make this episode by creating summaries that were based on Wall Street Journal reporting and then reviewed and adapted by an editor. We'll have more coverage of the day's news on the Wall Street Journal's What's News podcast. Listen and subscribe wherever you get your podcasts.
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Chapters
5 chapters
1
What market conditions set the stage for today’s financial news?
0:00–0:36
2
How are rising oil prices and inflation fears affecting U.S. stock indexes?
0:36–0:58
3
Why are CEOs of Anthropic, OpenAI, and SpaceX urging a slowdown in AI development?
0:58–1:25
4
How is the AI‑safety slowdown impacting major chip makers like NVIDIA, Marvell, and Intel?
1:25–2:01
5
Why are software stocks such as CrowdStrike and Workday gaining while chip stocks fall?
2:01–2:41