- Equities fell globally as AI industry leaders’ calls to slow model development combined with rising oil prices to hit risk sentiment. Nasdaq 100 futures sank 1.8%, a key chip-stock ETF dropped 4.7% in early trading, and South Korea’s Kospi fell 3.3%. SoftBank Group slid the most in nearly three months.
- Brent crude jumped 2.5% to top $107 a barrel after Saudi Arabia closed its East-West pipeline as a precaution following attacks, adding fresh supply-disruption risk on top of the existing Iran-driven price pressure. The dollar rose 0.4% and gold fell 1.5% to $4,285.37 an ounce.
- Money markets now price nearly a 90% chance of a Fed rate hike Wednesday, with the Bank of Japan facing similar pressure Friday. Europe’s Stoxx 600 fell 0.3% and regional bonds underperformed as higher energy prices worsened the inflation outlook; two-year UK gilt yields rose six basis points to 4.87%.
- Jefferies’ Mohit Kumar offered a more measured read than the headline selloff implies: “Having guardrails would help steer the direction of AI development, but we do not think it is going to slow it down… the direction of travel, in our view, would still remain forward.”
What Happened?
The selloff followed Anthropic CEO Dario Amodei’s Saturday call for the industry to slow development of its most advanced models, a position OpenAI’s Sam Altman backed and xAI’s Elon Musk endorsed directly, saying “Dario is right.” Markets read the coordinated statement as a real risk to the AI capex cycle rather than a symbolic gesture, hence the outsized 4.7% drop in chip stocks versus the broader 1.8% Nasdaq futures decline. Berenberg’s Chris Armstrong framed it as a continuation of a broader repricing: “There was a bit of irrational exuberance in the middle of the summer that’s been unwound. This is, I think, another leg bringing down expectations.” On the corporate side, Anthropic confirmed its Nasdaq listing choice and told shareholders it expects a second straight profitable quarter, while Altman said OpenAI won’t go public this year given ongoing safety-related work.
Why It Matters?
KCM Trade’s Tim Waterer captured the mechanics well: two genuinely separate headwinds — AI slowdown concern and a fresh oil supply shock — landed simultaneously, and risk assets don’t distinguish cleanly between a sentiment-driven pullback and a fundamentals-driven one when both hit at once. The chip ETF’s sharper decline relative to the broader index shows markets are treating AI infrastructure spending as the more fragile part of the current rally, consistent with M&G’s Maria Municchi noting investors are growing “a little bit more wary” about whether AI capex will translate into delivered earnings. The Saudi pipeline closure is the more structurally important development for macro positioning broadly, since it adds a second active supply risk alongside the ongoing Iran situation, right as central banks debate whether energy-driven inflation requires the “look-through doctrine” abandonment already discussed elsewhere in today’s coverage.
What’s Next?
This week’s Fed and BoJ decisions are the immediate catalysts, both complicated further by today’s energy price move. Watch whether the Saudi pipeline closure is resolved quickly or signals a more sustained supply disruption, since that determines whether oil’s contribution to today’s selloff fades or compounds. On the AI side, Jefferies’ skepticism that guardrails will meaningfully slow development, not just redirect it, is the read worth testing against actual company behavior in the coming weeks — concrete capex or hiring cuts from Anthropic or OpenAI would be the signal that moves this from sentiment to fundamentals.
Afftected Ticker
NVDA
AMD
AVGO
TSM
MU
ASML
SFTBY
META
MSFT
GOOGL
AMZN
XOM
CVX
COP
Source: Bloomberg
