U.S. stocks fell sharply on Thursday as investors reassessed the risks tied to the rapid buildout of artificial intelligence. Concerns that AI could disrupt entire industries and weigh on employment triggered a broad-based retreat.
The Dow Jones Industrial Average dropped 669 points, or 1.34 per cent, to 49,452. The S&P 500 declined 1.57 per cent to 6,833, while the Nasdaq Composite slid 2.03 per cent to 22,597.
Losses were led by technology and communication stocks. Cisco Systems plunged 12 per cent after issuing weaker-than-expected profit guidance, marking its steepest decline in more than two years.
AI concerns spread across sectors
Selling extended beyond traditional tech names. Financial stocks such as Morgan Stanley came under pressure amid fears AI could disrupt wealth management models. Logistics group C.H. Robinson tumbled 14 per cent on concerns automation could erode revenue streams.
Real estate was also hit. Shares in CBRE Group and SL Green Realty declined as investors weighed the possibility that higher unemployment could weaken office demand.
Software stocks continued their slide. Palantir Technologies fell nearly 5 per cent, taking its year-to-date decline beyond 27 per cent. Autodesk dropped almost 4 per cent. The iShares Expanded Tech-Software Sector ETF fell close to 3 per cent and remains more than 30 per cent below its recent high.
Commodities retreat as investors turn defensive
A sharp sell-off in silver futures, down 10 per cent, added to the risk-off tone. Oil briefly slid 3 per cent, while gold dipped more than 3 per cent during trade. The U.S. 10-year Treasury yield fell 7 basis points to 4.11 per cent, reflecting demand for safer assets.
Defensive names outperformed. Walmart rose 3.8 per cent and Coca-Cola gained 0.5 per cent. Consumer staples and utilities were the only S&P 500 sectors to finish higher, each rising more than 1 per cent.
Attention now turns to January inflation data, with economists expecting a 0.3 per cent monthly rise in both headline and core CPI.
ASX set to fall as global volatility intensifies
Australian shares are poised to open lower, tracking Wall Street’s decline and renewed weakness in commodities and technology. S&P/ASX 200 futures are down 78 points, or 0.87 per cent, to 8,895.
Locally, results are due on Friday from BWP Trust, Cochlear, GQG Partners, Nick Scali and Westpac, as earnings season continues to shape the direction of the local market.
