Global Stocks Plummet as AI Concerns and Oil Prices Rise
Global stocks fell on Monday due to concerns about AI development and rising oil prices. Shares of companies linked to AI, such as Marvell, Intel, and Micron, plummeted between 4.5% and 5.7%. This decline was partly triggered by warnings from OpenAI CEO Sam Altman, Anthropic CEO Dario Amodei, and Elon Musk's xAI about the need for a slowdown in AI development to manage risks.
The Brent oil price surged almost 3% as new strikes on Saudi Arabia and ships in the Gulf strained nerves. Investors are bracing for potential interest-rate hikes in the US and Japan this week due to rising inflation. The U.S. consumer inflation report came in hotter than expected, with a near-90% chance of the Federal Reserve raising rates on Wednesday.
Lombard Odier chief economist Samy Chaar stated that 'there's been no real equity-market drama in the face of 5% yields and high oil prices.' However, he added that if disruptions in Hormuz continue, central banks may need to implement more rate hikes. The European Central Bank raised rates last week and signalled further tightening could follow.