Wall Street ended lower on Monday as growing concerns about artificial intelligence pushed major chipmakers sharply down. Investors also reacted to a jump in U.S. Treasury yields and rising oil prices.
The AI slowdown fears hit companies that have benefited heavily from the rapid expansion of artificial intelligence. Nvidia, Broadcom, Micron Technology and Advanced Micro Devices all lost ground.
At the same time, the 10-year U.S. Treasury yield briefly moved above 5%. That marked its highest level since 2023. The move added to worries about inflation and higher borrowing costs.
AI Slowdown Fears Hit Chip Stocks
The latest market selloff followed warnings from senior executives at major AI companies.
Leaders at Anthropic, OpenAI and xAI have raised concerns about the risks of developing advanced AI too quickly. They have also called for a slower approach to AI development.
As a result, investors questioned whether the enormous spending on AI infrastructure can continue at its current pace.
Nvidia fell sharply, while other major semiconductor companies also declined. The Philadelphia Semiconductor Index suffered a steep drop of nearly 6%, showing how strongly the concerns affected the sector.
The selloff also spread beyond the United States. AI-related shares fell across major global markets as investors reassessed the outlook for the industry.
Treasury Yields Add Pressure
Meanwhile, the bond market created another source of concern.
The 10-year Treasury yield briefly crossed 5% before retreating. Investors have grown increasingly worried about inflation, government borrowing and the long-term U.S. fiscal outlook.
Higher Treasury yields can make stocks less attractive. They can also increase borrowing costs for companies and consumers.
Therefore, the rise in yields added another challenge for a stock market already facing pressure from the technology sector.
Markets are also preparing for the Federal Reserve’s policy decision this week. Traders expect the central bank to raise interest rates by 25 basis points as officials respond to persistent inflation risks.
Oil Prices Raise Inflation Concerns
Oil prices added to the uncertainty as well.
Brent crude climbed above $105 a barrel after fresh attacks affected Saudi energy infrastructure and shipping routes in the Middle East. The disruption raised concerns about global energy supplies.
Higher oil prices can push inflation higher. That could make it harder for the Federal Reserve to ease monetary policy.
Consequently, investors are watching both energy markets and Treasury yields closely.
Wall Street Indexes Finish Lower
The three major U.S. indexes all ended Monday’s session in negative territory.
The S&P 500 fell 0.48%, while the Nasdaq Composite dropped 0.56%. The Dow Jones Industrial Average declined 0.29%.
However, not every technology stock suffered.
Several software companies rebounded after recent selling pressure. Investors have recently worried that rapid AI advances could threaten the business models and profit margins of established software firms.
Still, the sharp decline in chip stocks showed that AI-related investment remains a major driver of market sentiment.
For now, investors face several risks at once. AI uncertainty, higher oil prices, rising Treasury yields and the Federal Reserve’s next interest-rate decision could keep Wall Street volatile.
