US markets experienced a sharp sell-off on Monday, as growing investor concerns about the economic impact of artificial intelligence combined with worries about global trade protectionism, leading to widespread selling across various sectors.
The Dow Jones Industrial Average suffered a significant loss of 850 points, or 1.7%. The Nasdaq , which tracks major technology companies, followed suit, declining by 1.4%, while the broader S&P 500
General context: Artificial intelligence between optimism and apprehension
This decline comes at a time when the market is experiencing a kind of duality regarding the artificial intelligence boom. After months of strong gains led by major technology companies thanks to their massive investments in this field, serious concerns have begun to surface about the other side of this technological revolution. The anxiety is no longer limited to fierce competition between companies, but extends to the possibility that these technologies could lead to structural disruptions in the labor market and the economy as a whole.
These fears were heightened over the weekend after Citron Research published an analysis warning that the rapid adoption of artificial intelligence could lead to widespread job losses, predicting that the unemployment rate could rise to 10%, sparking panic on Wall Street.
The impact of artificial intelligence on the technology sector
The technology sector was at the center of the storm, with IBM's stock plummeting 11%, impacted by Anthropic's announcement of advanced software capabilities for its Cloud Code model, highlighting the rapid pace of development in this field and the ability of startups to challenge established giants.
IBM wasn't alone; other software companies also faced heavy selling pressure, with Microsoft shares falling 2% and CrowdStrike shares dropping 5%. This decline reflects investor concerns that new AI-powered tools could reduce demand for traditional software or reshape existing business models.
Importance and expected effects
The negative impact wasn't limited to the technology sector; it extended to other vital sectors as well. Shares in transportation, logistics, commercial real estate, and financial services companies experienced similar losses. This is seen as an indication that investors are beginning to price in the long-term risks of artificial intelligence, which could include reduced demand for office space due to AI-enhanced remote work and the automation of jobs in the financial and service sectors.
Internationally, the world is closely watching Wall Street's performance, as any significant downturn in US markets tends to send shockwaves through global stock exchanges. Adding to the concerns surrounding President Donald Trump's potential decision to raise tariffs is increasing global economic uncertainty, which could drive investors toward safer assets and negatively impact capital flows to emerging markets.
