Stock Market Today: AI Slowdown, Cybersecurity Rally, BAC Sells

Marley Kayden (0:00)

Welcome to The Wrap. I'm Marley Kayden, here to take you through today's market action. Markets closed off their opening lows. The Nasdaq 100 was down as much as 1.7%, but recovered to finish down just a tenth of a percent, while the S&P 500 and Dow fell less than a half percent. Communication services, consumer staples, and healthcare were all up more than 1%, while industrials, energy, tech, and utilities were down more than 1%.

The US 10-year treasury yield hit 5% for the first time since October of 2023, and oil prices approached $105 before closing near $102 a barrel. As we look at stocks that were on the move today, the tech weakness came after comments over the weekend from AI leaders. A new debate over the pace and safety of artificial intelligence rattled the tech trade. Anthropic CEO Dario Amadei is calling for companies to slow development of their most advanced AI models, while OpenAI CEO Sam Altman says an IPO this year would be ill-advised. Chip and AI infrastructure stocks were among the biggest losers, with Corning down 14%, Skyworks falling 10% and Lamb Research down 8%.

Cybersecurity stocks surged though as investors rotated from AI hardware into software. CrowdStrike jumped 14% leading the S&P 500, while Palo Alto Networks gained 13%.

Concerns about AI safety helped fuel the rally, with investors betting that cybersecurity companies could play a bigger role in reviewing advanced AI models. And Bank of America shares fell 5% after CEO Brian Moynihan outlined a weaker third quarter for its Wall Street businesses. He expects investment banking fees to fall more than 10% from a year earlier, with trading revenue roughly flat, which is a sharp slowdown from the second quarter. On Tuesday, the FOMC meeting begins ahead of Wednesday's announcement, with the recent spike in yields, the 20-year bond auction and the Treasury buyback announcement will also draw extra attention. That is going to do it for the wrap. I'm Marley Kayden. Remember you can tune in 24-7 to schwabnetwork.com and subscribe to our YouTube channel.