Europe's Stocks Plummet on AI Safety Concerns and Rate Hike Bets
European stocks began the week on a downward trajectory due to concerns over AI safety and bets on a Federal Reserve rate hike. The pan-European Stoxx 600 index slipped 0.3%, its lowest level in nearly two months, as investors took a defensive stance ahead of major central bank policy decisions.
The Bank of Japan, the Bank of England, and the Federal Reserve are all set to make key interest rate announcements this week. Investors priced in an 86% probability of a quarter-point Fed rate increase at its Sept. 15-16 FOMC meeting, with another rate hike expected in December.
The AI sector took a hit after industry leaders OpenAI and Anthropic called for a temporary slowdown in advanced AI model development. Shares in technology vendors and semiconductor suppliers fell across Frankfurt, Paris, and Amsterdam, with NVIDIA down 5.2% and AMD dropping 4.4%.