U.S. stocks fell on Monday as a strong selloff in AI and semiconductor stocks collided with rising oil prices and another jump in Treasury yields. The S&P 500 and Nasdaq Composite were each down about 0.2% by midday after paring steeper losses, while the Dow Jones Industrial Average hovered near the flatline.
Technology was the clear pressure point after warnings from some of the AI industry’s most prominent executives rattled a trade built around rapid advances in increasingly powerful models. At the same time, Brent crude traded near $107 per barrel, and the 10-year Treasury yield briefly breached 5%, giving investors plenty to worry about ahead of Wednesday’s Federal Reserve decision.
Market Movers:
- RUM Group (RUM) +22%: Shares soared following reports that Anthropic is behind a previously disclosed $13.7 billion computing contract with the company formerly known as Rumble. RUM had revealed the massive agreement in an August securities filing without identifying the customer, making the reported Anthropic connection a major new catalyst for the stock.
- GSK (GSK) +3%: Shares climbed after the pharmaceutical giant reported encouraging clinical results across its oncology pipeline, including a 94% tumor response rate for investigational lung cancer therapy Jideytro. GSK also said Ris-Rez reduced the risk of death by 54% compared with standard chemotherapy in a separate study of patients with relapsed small cell lung cancer.
- Nvidia (NVDA) -3%: Shares fell after Anthropic CEO Dario Amodei called for slowing the pace of frontier AI development, with OpenAI CEO Sam Altman also supporting the need to more carefully pace progress. The comments raised questions about the trajectory of AI infrastructure demand and sparked broad selling across chipmakers and other companies tied to the AI buildout.
- AMD (AMD) -5%: Shares sank as the AI warning triggered a broad retreat from semiconductor stocks, with investors reassessing expectations for relentless growth in computing demand. AMD joined Nvidia and other major chipmakers in the selloff as concerns spread across the hardware side of the AI trade.
- Micron Technology (MU) -5%: Shares dropped as investors pulled back from memory and AI semiconductor names following calls for slower frontier-model development. The decline reflected broader concern that any meaningful slowdown in AI advancement could eventually temper demand for high-performance memory and data-center hardware.
- Marvell Technology (MRVL) -6%: Shares slid as networking and semiconductor stocks were hit particularly hard by the sudden shift in AI sentiment. Marvell’s exposure to data-center infrastructure left it vulnerable as investors reconsidered the pace of spending behind next-generation AI systems.
- CoreWeave (CRWV) -6%: Shares fell as concerns about slower AI development weighed on companies directly tied to supplying computing capacity to frontier AI labs. The cloud infrastructure provider has been a major beneficiary of soaring demand for GPUs, making the possibility of slower model development especially relevant to its growth outlook.
- Nebius (NBIS) -7%: Shares tumbled alongside other AI infrastructure stocks as investors questioned whether calls to slow frontier-model development could ultimately affect computing demand. The stock was among the hardest hit in a broad retreat spanning chips, networking equipment and AI cloud infrastructure.
AI Warning Shakes Wall Street’s Biggest Trade
AI stocks came under unusually broad pressure after Amodei argued that developers need to slow advances in increasingly capable models so safety measures have time to catch up. Altman subsequently agreed that the industry needs to more carefully pace frontier development, putting two of the leading AI companies behind a more cautious approach.
The comments struck directly at one of Wall Street’s central assumptions: that increasingly powerful models will require a relentless expansion of GPUs, memory, networking equipment and data-center capacity. Nvidia fell 3%, while several semiconductor and infrastructure names suffered even steeper declines.
Oil Near $107 Keeps Inflation Fears Alive
Technology wasn’t the market’s only problem. Brent crude traded near $107 per barrel after Saudi Arabia shut down a key pipeline as the Middle East conflict continued to disrupt energy supplies. Those energy pressures have complicated the Fed’s inflation fight just days before its September meeting. The 10-year Treasury yield briefly crossed 5% Monday for the first time since 2023, while the 30-year yield remained elevated near 5.4%.
Fed Decision In Focus
Wednesday’s Fed decision now represents the next major test for markets. Following Friday’s sticky inflation report and the continued surge in energy prices, traders are pricing roughly an 88% probability of another rate hike. That combination of higher rates and uncertainty surrounding AI growth is particularly uncomfortable for technology stocks. Elevated Treasury yields pressure valuations at the same time investors are reconsidering some of the aggressive growth assumptions underpinning the AI trade.
Looking Ahead
Wall Street enters the Fed meeting with two of its biggest recent concerns intensifying simultaneously: inflation and uncertainty around AI. Investors will be watching Wednesday’s decision for clues about whether another rate increase represents a one-off response to sticky prices or the beginning of a more sustained tightening cycle.
AI stocks face their own test. Monday’s selloff shows just how dependent valuations have become on expectations for rapid model development and infrastructure spending, making any further signals from the industry’s leading labs potentially significant for Nvidia and the broader semiconductor trade.