European Stocks Plummet Amid AI Safety Concerns and Rising Yields

European stocks closed sharply lower on Monday, weighed down by rising sovereign yields and growing concerns about AI safety.

The Euro STOXX 50 index fell 1.1% to 6,257, while the STOXX Europe 600 dropped 0.5% to 636.

The drop in stocks was partly due to a warning from Anthropic CEO Dario Amodei, who called for a slowdown in the development of frontier AI models to prevent potential losses of control in agents that could harm society.

This led to endorsements from rival companies OpenAI and xAI, further pressuring stocks in the chip manufacturing sector. ASML and Infineon, two major players, sank 6.3% and 7.5%, respectively, while Schneider Electric lost 6.8% and Siemens Energy plummeted 8.5%.

The escalation of tensions in the Middle East also contributed to the decline in stocks, as it lifted oil and gas prices and worsened the inflation outlook in the Eurozone.