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Update: Wall Street Dips as AI Warnings Weigh on Tech Sector

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Update: Wall Street Dips as AI Warnings Weigh on Tech Sector

(Updates with market moves at the end of the day, and other changes, if any.)

Wall Street's equity benchmarks fell Monday as warnings from Anthropic and OpenAI on increasing safety risks tied to artificial intelligence triggered a selloff in the technology sector.

The tech-heavy Nasdaq Composite declined 0.6% to close at 26,186.41. The S&P 500 dropped 0.5% to 7,619.98, while the Dow Jones Industrial Average dipped 0.3% to 52,421.20. Most sectors ended in the red, led by tech, while communication services paced the gainers.

Dario Amodei, chief executive of AI chatbot Claude maker Anthropic, called on the industry Saturday to slow the pace at which it advances AI model capabilities. OpenAI CEO Sam Altman and Tesla (TSLA) and SpaceX (SPCX) CEO Elon Musk supported Amodei's call.

OpenAI's initial public offering will not take place this year, Altman separately said in a Fortune Magazine interview, citing the need for safety-related work, according to Bloomberg News.

Shares of tech bellwether Nvidia (NVDA) were the third-worst performer on the Dow, down 3.4%. Advanced Micro Devices (AMD), Micron Technology (MU), SanDisk (SNDK), Intel (INTC) and Qualcomm (QCOM) also closed lower.

US President Donald Trump sought to allay those AI safety fears, calling them a "hoax."

"AI taking over the world, destroying humanity, and all other things bad, is a hoax," he said in a social media post on Monday.

In an earlier post on Truth Social, Trump said that "there is a sick conspiracy going on against AI and data centers, and the only one that is happy about it is China."

West Texas Intermediate crude oil was up 1.7% at $101.76 a barrel in Monday late-afternoon trade, while Brent rose 1.6% to $106.23, both trading off the day's peaks.

The Islamic Revolutionary Guard Corps said it destroyed an advanced US MQ-1 drone over the Strait of Hormuz, a key crude and energy chokepoint, CNBC reported.

A meeting to discuss the future of the strait, scheduled for Monday with Tehran and Gulf states, has been postponed, Omani Foreign Minister Badr Albusaidi said on X. The postponement comes following Yemen's Iran-aligned Houthis' attack on Saudi Arabia last week.

Trump said Monday that Iran "wants to make a deal, quickly and badly."

"I will determine whether or not the USA will choose to engage," Trump said in a social media post.

Treasury yields were higher, with the two-year rate rising 1.4 basis points to 4.66% and the 10-year rate up 1.2 basis points at 4.99%.

The Federal Reserve is expected to raise interest rates by 25 basis points at this week's policy meeting, with its latest "dot plot" likely signaling another hike later this year, UBS Securities said in a note. The Federal Open Market Committee kicks off its two-day meeting on Tuesday.

Markets are currently pricing in a 95% probability that the Fed will raise the benchmark lending rate by 25 basis points on Wednesday, according to the CME FedWatch tool. The remaining odds point to another central bank pause.

In other company news, Baldwin Insurance (BWIN) has agreed to be acquired and taken private by a consortium that includes the family investment firm of Dell Technologies (DELL) Chief Executive Michael Dell, in a deal worth $7.7 billion. Baldwin shares jumped 7.9%.

Spot gold lost 1.5% to $4,285.73 per troy ounce, while silver shed 2.6% to $63.48 per ounce.

What else is happening in US Markets?

JD.com Unit Dada Nexus to Pay SEC $500,000 Over 'Sham' Ad Transactions
US Markets

JD.com Unit Dada Nexus to Pay SEC $500,000 Over 'Sham' Ad Transactions

A unit of JD.com (HKG:9618) has agreed to pay $500,000 to settle U.S. Securities and Exchange Commission charges that it engaged in "sham transactions" to inflate revenue, according to a cease-and-desist order issued Friday.Dada Nexus, the on-demand delivery platform behind JD Daojia and Dada Now, consented to the order without admitting or denying the SEC's findings, the commission said.The JD.com unit has to pay the penalty within 10 business days.The SEC found that from October 2022 through September 2023, employees in Dada's advertising and marketing unit entered into sales and purchase contracts with customers and vendors in equal amounts."At least some of the relevant customers and vendors had undisclosed connections and earned commissions related to the relevant contracts, and no services were provided under the relevant contracts," the SEC said.The commission noted that Dada's net revenues were overstated by 8.24% in the second quarter of 2023 and 9.34% in the third quarter of 2023. Operations and support costs were also inflated by 14.24% and 14.32% in those two quarters, respectively.From October 2022 to September 2023, net revenues were inflated by about 568 million yuan and costs by roughly 576 million yuan, the order said.Without the transactions, Dada's revenue would have missed its guidance by about 7% in the second quarter of 2023 and 6% in the third quarter of that year.Dada discovered the scheme during a routine internal audit in November 2023 and conducted an independent review. After disclosing the findings in January 2024, Dada's ADSs plummeted 43%.Dada Nexus did not immediately respond to' request for comment.

HKG:9618
Update: Wall Street Rises at End of Losing Week Amid Inflation Worries
US Markets

Update: Wall Street Rises at End of Losing Week Amid Inflation Worries

(Updates with market moves at the end of the day, and other changes, if any.)US stocks rose Friday after a four-day slump to trim weekly losses, even as expectations grew that the Federal Reserve will hike interest rates as soon as next week amid mounting inflation concerns.The Dow Jones Industrial Average and the Nasdaq Composite gained 1% each to close at 52,573.29 and 26,333.04, respectively. The S&P 500 climbed 0.9% to 7,656.98. Barring utilities and healthcare, all sectors ended in the green, led by communication services.The holiday-shortened trading week saw the Dow shedding 1.6%. The S&P 500 and the Nasdaq logged weekly losses of 0.8% and 0.7%, respectively.In economic news, US consumer inflation hit a three-month high in August as energy prices rose, while the core measure unexpectedly accelerated, official data showed."With oil prices up significantly in recent weeks, again hovering around $100 per barrel and underlying price pressures in services remaining sticky, a (Fed) rate hike at next week's meeting now appears all but certain," TD Economics said in a note.The probability of the US central bank increasing its benchmark lending rate by 25 basis points next week jumped to 87% Friday from 72% Thursday, according to the CME FedWatch tool. The odds pointing to another Fed pause fell to 13% from 28%.US consumer sentiment weakened in September, while inflation expectations rose, with the year-ahead price growth outlook reaching the highest reading since June, preliminary results of a University of Michigan survey showed.West Texas Intermediate crude oil was down 2% at $100.44 a barrel in Friday late-afternoon trade, while Brent dropped 2.6% to $104.80. However, both benchmarks were on track for their second consecutive weekly advances as tensions in the Middle East intensified earlier in the week.Saudi Arabia's Energy Ministry said Friday that the kingdom shut down its key East-West crude oil pipeline in the Riyadh and Madinah regions as a precautionary measure a day after the facility was targeted in multiple attacks. Yemen's Iran-aligned Houthis reportedly launched strikes on Saudi energy infrastructure in recent days.A six-member bloc of Gulf states is considering talks with Iran next week over the future of the Strait of Hormuz, the world's most important chokepoint for crude flows, news outlets reported Friday.The International Energy Agency on Friday projected a steeper contraction in oil demand this year as the Middle East conflict is expected to hamper production and push energy prices higher.Diesel prices in the US surged past $6 per gallon for the first time ever Friday amid concerns over energy supply disruptions that in turn could fuel inflation.Treasury yields were higher, with the two-year rate up 7.5 basis points at 4.63% and the 10-year rate rising 2.7 basis points to 4.97%.In company news, Dell Technologies (DELL) shares jumped 12%, the second-biggest gain on the S&P 500, as RBC Capital Markets initiated its coverage of the computer maker's stock with an outperform rating and a $640 price target.Dell is well positioned to benefit from the multiyear artificial intelligence infrastructure spending cycle, RBC said in a note.ACV Auctions (ACVA) shares surged 44%, while Copart (CPRT) fell 2.6%. Late Thursday, the companies said Copart will acquire ACV Auctions for $10.50 per share in cash, representing an implied equity value of roughly $1.9 billion.Spot gold edged up 0.7% to $4,348.43 per troy ounce, while silver was little changed at $64.94 per ounce.

Dow JonesNasdaq CompositeS&P 500$ACVA$CPRT$DELL
IEA Cuts Oil Demand Outlook as US-Iran Deadlock Seen Impacting Production
US Markets

IEA Cuts Oil Demand Outlook as US-Iran Deadlock Seen Impacting Production

The International Energy Agency on Friday projected a steeper contraction in oil demand this year as the Middle East conflict is expected to hamper production and push energy prices higher.The agency expects oil consumption to decline by 2.5 million barrels a day in 2026, about 940,000 barrels more than its prior estimate.The ongoing deadlock in US-Iran negotiations postpones the potential recovery of oil flows into next year, with supply losses centered on middle distillates and petrochemical feedstocks in Asia, according to the IEA."With the protracted US-Iran diplomatic standoff and renewed attacks in both the Gulf and the Red Sea's Bab el-Mandeb choke point continuing to hamper the normalization of oil flows, we have further cut our supply and demand projections for the remainder of the year," the IEA said.Tensions recently flared up between Washington and Tehran, sparking fears of prolonged supply disruptions and sending oil prices over $100 a barrel this week. Brent and West Texas Intermediate were falling on Friday, but are up more than 15% each in September so far following two back-to-back monthly gains.Prices for diesel and gasoil, which make up nearly 30% of global demand, surpassed $200 per barrel in the US in early September, 94% above pre-war levels, according to the IEA report.Diesel prices in the US surged past $6 per gallon for the first time ever on Friday amid concerns over energy supply disruptions, according to AAA motor club data."The rise in both crude futures and physical prices pales in comparison with those for refined products, where market tightness is now most acute," the IEA wrote.The agency expects global oil demand to rise by 2.6 million barrels per day in 2027.Global oil supply is projected to decline by 5.7 million barrels a day to 100.7 million barrels in 2026. The IEA previously expected supply to fall by 4.3 million barrels a day.Total oil production slid in August as more than 10 million barrels a day of Gulf output remained shut in amid heightened security risks, the IEA said Friday. Oil inventories across the world have depleted by 507 million barrels since the Iran war began at the end of February.A full recovery in supplies from Middle Eastern producers will be deferred until 2027, according to the IEA report.The Organization of the Petroleum Exporting Countries lowered global oil demand projections for 2026 on Thursday amid high energy prices.