Artificial intelligence stocks finally ran out of steam and major U.S. stock indexes were paying the price on Monday.
The Dow Jones Industrial Average fell 347 points, or 0.7%. The S&P 500 dropped 0.8%. The Nasdaq Composite slid 0.9%.
Pretty much everything struggled on Monday, but AI stocks that underpinned the Nasdaq’s rally to a fresh high in the past week were among the biggest losers on the day.
Utilities, which once rode a wave of AI enthusiasm, fell to levels not seen in more than a year.
Updates on Meta Platform’s artificial intelligence agent Muse rejuvenated AI excitement last week, but news of an additional $150 billion in stock buybacks from Nvidia couldn’t keep the AI rally rolling in the face of the continued bond market rout.
The yield on the 30-year Treasury note is now at its highest levels since June 10, 2002, according to Dow Jones Market Data. The yield on the 2-year Treasury note rose to 4.92%, which is its highest level since May 30, 2024. The yield on the 10-year note hit 5.24%, its highest 3 p.m. ET close since June 12, 2007.
Stocks rallied into the weekend on hopes the U.S. and Iran would make progress on reopening the Strait of Hormuz. As has been the case with many rallies seeking to front-run an actual end to the Iran war, investors following developments over the weekend were left disappointed heading into the open on Monday.
The calendar was light on Monday, but a wave of economic data are due in the coming days. The August personal consumption expenditures price index on Wednesday and the September nonfarm payrolls report on Friday will be the headliners.
