AI Slowdown Fears Sink Chip Stocks, U.S. Indices Close Lower

Concerns over a potential slowdown in artificial intelligence development weighed on AI-related stocks on Wall Street on Sept. 14, with Nvidia, Micron Technology, and Intel falling 3.36%, 5.25%, and 5.59%, respectively. The Dow Jones Industrial Average fell 152.09 points, or 0.29%, to 52,421.20; the S&P 500 dropped 37.00 points, or 0.48%, to 7,619.98; and the Nasdaq Composite declined 146.622 points, or 0.56%, to 26,186.413.

Several U.S. tech entrepreneurs have recently called on AI companies to slow down the development of frontier technologies. Dario Amodei, CEO of Anthropic, wrote on Sept. 12 that AI companies need to moderate the pace of building the most advanced models due to safety concerns. Elon Musk and OpenAI CEO Sam Altman echoed that view.

Wall Street grew wary that AI development might decelerate. David Wagner, portfolio manager at Aptus Capital Advisors, said public discussions by prominent tech figures about slowing frontier AI development have hit market sentiment. He added that if AI capital expenditure growth slows, corporate earnings may be affected, but free cash flow could improve, offering some valuation support.

Rising U.S. Treasury yields also dampened sentiment, with the 10-year yield briefly breaking above 5% on Sept. 14 for the first time since October 2023. Wagner cautioned that the market is entering a seasonally weak period, and with midterm election issues heating up, U.S. stocks may continue to weaken.