US Stocks Plummet Amid AI Woes and Soaring Bond Yields
US stocks experienced a downturn on Tuesday as investors grappled with higher bond yields and concerns about the impact of artificial intelligence (AI) development. The yield on 10-year US Treasuries reached a 19-year high of 5.02%, before moderating slightly, which added to inflation worries exacerbated by lofty oil prices.
The Federal Reserve is set to make a decision on interest rates on Wednesday, with futures markets indicating a 93% chance of a rate hike. This comes as Anthropic CEO Dario Amodei called for slowing AI development due to fears about the potential risks of AI agents going rogue.
Markets were also cautious about the impact of higher energy prices and bond yields on economic growth. 'The combination of both higher energy prices and higher yields in the Treasury curve certainly act as a headwind to markets,' said Art Hogan of B Riley Wealth Management.