AI Stocks Drop on Calls for Slowdown   09/14 09:47

   Artificial-intelligence stocks are sliding worldwide Monday after leaders of 
the industry warned a slowdown is needed for safety. Another jump in oil 
prices, meanwhile, sent the bond market to its latest pressure-raising 
milestone as the yield on the 10-year Treasury hit 5% for the first time since 
2023.

   NEW YORK (AP) -- Artificial-intelligence stocks are sliding worldwide Monday 
after leaders of the industry warned a slowdown is needed for safety. Another 
jump in oil prices, meanwhile, sent the bond market to its latest 
pressure-raising milestone as the yield on the 10-year Treasury hit 5% for the 
first time since 2023.

   Despite all the downers, though, gains for many stocks outside AI helped 
limit Wall Street's losses. The S&P 500 fell 0.6%, and more stocks rose within 
the index than fell. The Nasdaq composite, which has many more tech stocks, 
dropped a market-leading 0.9%, while the Dow Jones Industrial Average was down 
159 points, or 0.3%, as of 10:20 a.m. Eastern time.

   AI stocks have been under pressure a while because of worries their prices 
shot too high in the frenzy around the technology. The concerns jumped to 
another level over the weekend after one of the industry's leading voices, 
Anthropic CEO Dario Amodei, called for a deliberate and global slowdown in the 
development of AI.

   He cited safety issues, including the risk that AI becomes capable of 
leading a swarm of agents that could take over the entire internet within six 
to 12 months.

   Nvidia, whose profits have soared because its chips are helping to train AI 
models, sank 3.5% and was the heaviest weight on the market because of its 
massive size.

   SpaceX, which gets a chunk of its business from AI, fell 1.7% after Elon 
Musk said over the weekend that he agrees with Amodei. Softbank Group, the 
Japanese giant that is a major investor of OpenAI, lost 10.7% in Tokyo after 
OpenAI's Sam Altman likewise supported the concept of a slowdown.

   Altman also said in an interview with Fortune published on Saturday that 
OpenAI would likely wait until next year for a sale of its stock on Wall 
Street, potentially delaying a potential gusher of cash for Softbank and other 
early investors in OpenAI.

   In South Korea, the Kospi index dropped 3.3% due to losses for its two most 
influential stocks, Samsung Electronics and SK Hynix.

   President Donald Trump played down the need for his administration to check 
the development of AI, saying he worried about ceding America's edge over China 
in a global competition and that winning would help address the risks from the 
advancing technology.

   He said on his social media network Monday that the only guardrail AI needs 
"is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in 
spades!"

   Helping to limit Wall Street's losses on Monday were several software 
companies that tumbled earlier this year on worries that AI-powered competitors 
would undercut their businesses. Intuit, the company behind TurboTax and 
QuickBooks, rose 4.8%. Autodesk, whose software helps designers, climbed 4.4%, 
and Adobe added 2.8%.

   Stocks in the oil industry also rose, including a 1.3% gain for ExxonMobil, 
following another jump in crude prices.

   The price for a barrel of Brent crude rose 4.2% to $109.05 as fighting in 
the Middle East keeps squeezing the global flow of oil.

   An important Saudi oil pipeline will mostly be out of service for weeks 
following an attack last week, two regional officials told The Associated 
Press. The pipeline offered a way for Saudi Arabia to shift exports to the Red 
Sea and avoid the Persian Gulf's Strait of Hormuz, where Iranian attacks have 
stifled the movement of oil tankers.

   Brent has jumped from less than $72 in early July as doubts rise that the 
United States and Iran can come to an agreement that would allow oil tankers to 
freely exit the Persian Gulf through the strait again.

   While the prospect of a de-escalation of war in Iran may have dimmed, ING 
commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary 
on Monday that the situation is still fluid and "sizable" volumes of oil have 
still been moving through the strait.

   So far, the jump in oil prices has helped send the average cost of a gallon 
of regular gasoline across the country to nearly $4.32 from $4.08 a month ago 
and $3.18 a year ago, according to AAA.

   Such upward pressure on inflation has much of Wall Street expecting the 
Federal Reserve will hike its main interest rate on Wednesday at the end of its 
next meeting.

   That's the traditional way the Fed tries to rein in high inflation. Such a 
move then filters out through the rest of the bond market, makes it more 
expensive for U.S. households and businesses to borrow money, slows the overall 
economy and undercuts prices for investments. That hopefully would remove some 
of inflation's fuel, though Trump has been lobbying for lower interest rates 
instead of higher.

   Besides high inflation, worries about rising debt for the U.S. and other 
governments have helped send longer-term Treasury yields to their highest 
levels in years.

   The yield on the 10-year Treasury rose to 5.00% from 4.96% late Friday and 
just 3.97% before the war with Iran began in February.

   The jump has already made it more expensive for U.S. households and 
companies to borrow, including the highest average long-term mortgage rate in 
more than 14 months.