Rogue AI fears and the impact on Wall Street

Main US indexes now just modestly red.

Industrials is the weakest S&P 500 sector; comm svcs leads gainers.

Dollar rallies; US crude up ~1.5%; bitcoin gains >2%; gold down ~1%.

US 10-year Treasury yield hits 5.01%, highest since October 2023, then reverses down to ~4.95%.

The PHLX Semiconductor Sector index .SOX is down 5% on Monday and on track for its biggest daily percentage decline since late July as investors digest comments over the weekend from Anthropic CEO Dario Amodei, calling on AI companies to slow the pace at which they advance model capabilities.

Elon Musk, who runs xAI, and OpenAI CEO Sam Altman said they agreed with Amodei.

The semi index is sharply underperforming the Nasdaq .IXIC, which is now barely lower in afternoon trading, but the SOX remains up about 58% for the year so far. Shares of Microsoft MSFT.O and other software companies are higher Monday after the news.

Enthusiasm for AI and massive spending by companies have driven up shares of chip stocks this year, and the latest second-quarter earnings season showed that spending continued to benefit chip companies. The semi stocks had suffered sharp swings in July as investors took some profits and worried companies may be overspending on AI infrastructure.

Last week, Anthropic researcher Jacob Coxon resigned and said the "people building AI earnestly believe that it could kill us all by the end of the decade."

The comments from Anthropic's CEO have put more focus on those worries for Wall Street, says Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.