Wall Street equities pared sharper early losses on Monday after leading artificial intelligence executives called for an industrywide slowdown in development, even as rising bond yields and oil prices pressured broader markets.
The tech-heavy Nasdaq-100 fell 0.1% after tumbling as much as 1.5% in early trading, while the Dow Jones Industrial Average and the S&P 500 both slid 0.3%. Financial pressure intensified as the 10-year Treasury yield crossed the 5% threshold for the first time since 2023, while Brent crude traded near $105 per barrel following pipeline disruptions in the Middle East.
Technology shares faced initial selling pressure after Anthropic Chief Executive Officer Dario Amodei released a 3,800-word essay urging AI firms to slow model improvements to address safety risks. OpenAI Chief Executive Officer Sam Altman publicly aligned with the position, creating friction with Wall Street expectations for rapid innovation.
Concerns over AI safety also prompted OpenAI to postpone its initial public offering to 2027, according to statements Altman made to Fortune. Meanwhile, Anthropic continues to target a fall listing on the Nasdaq exchange.
The market instability coincides with the Federal Reserve's upcoming policy meeting on Wednesday, where futures markets show an 88% probability of an interest rate hike. Investors are monitoring the central bank's stance alongside sector-specific headwinds in financial earnings.
Bank of America stock dropped more than 5% on Monday following a weak dealmaking forecast from management. Investment banking fees are projected to reach $1.6 billion to $1.8 billion in the third quarter, down 10% to 20% compared to $2 billion recorded during the same period last year.
"We're not as well-positioned in some of the businesses that have more activity," Bank of America CEO Brian Moynihan said.
Moynihan noted that the broader investment banking pipeline remains robust despite current system delays. He added that sales and trading results are expected to remain flat compared to the previous year as institutional investors dial back risk exposure.
"We feel very good about the underlying US economy," Moynihan said.
Moynihan stated that consumer-focused operations remain resilient, with growth in loans and deposits tracking expectations ahead of the Federal Reserve's rate decision.
