As AI slowdown fears hit Wall Street, stocks of Nvidia, Intel declines significantly

The Nasdaq dropped 1.7% as investors anticipated a Federal Reserve rate hike and responded to calls for a slowdown in AI advancement. This comes as leading artificial intelligence companies raise concerns over the rapid advancement of the technology. Nvidia, which has been at the forefront of the AI-led rally, saw its shares fall 4.3% to the day's low of $209.

Shares of Broadcom, Advanced Micro Devices, and Intel each declined 5%, 6.5% and 8% while Marvell Technology shed 9.5%. Hyperscalers such as Amazon and Tesla also dropped more than 2% each.

The weakness dragged the Nasdaq Composite down 1.7% to the day's low of 28,867, while the S&P 500 and Dow Jones Industrial Average fell 0.6% and 0.3%, respectively.

Anthropic CEO Dario Amodei called for a slowdown in the development of advanced AI capabilities, with other major technology figures backing the proposal. The latest warnings have raised investor concerns that a slower pace of AI development could translate into weaker corporate spending and challenge earnings expectations across the AI supply chain.

Adding to the cautious market sentiment, technology stocks also came under pressure ahead of the US Federal Reserve’s policy meeting. Markets expect a rate hike—the first in more than three years—as inflation has remained above the central bank’s 2% target for over five years.

The sell-off followed comments by Anthropic CEO Dario Amodei on Saturday, when he said the company would introduce additional safeguards, including independent third-party evaluations. He also urged the broader AI industry to slow the development of its most advanced models.

OpenAI CEO Sam Altman supported the proposal, while xAI’s Elon Musk echoed the sentiment, saying, “Dario is right.”