Anthropic, Musk Call for Slower AI Development: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of trading Monday. As we share this collection of market drivers, U.S. equity futures point to the market trading lower when it opens.  

1. Stocks were on track to open lower on Monday after Elon Musk, Sam Altman, and Dario Amodei all called for a slowdown in the pace at which AI is developing, which hammered shares of chip and memory companies… The selloff came after Anthropic CEO Amodei wrote a blog post calling for AI giants to pace development of the technology, citing risks including losing control of AI systems and economic disruption. “Dario is right,” SpaceX and Tesla CEO Musk wrote in a social media post on X. The calls for a deceleration of AI development were dragging down high-flying tech stocks ahead of Monday’s opening bell.” (Barron’s)

With the CNN Fear & Greed Index pointing to the market being in a state of Fear and the Volatility Index climbing off Friday’s 15.84 closing, odds are we are going to see a sharp, knee-jerk reaction to companies in the AI ecosystem that will drag them lower. 

As we interpret the comments from Amodei, Musk and others, their focus is on current and future development, which isn’t the same as AI adoption and expanding usage in the enterprise, by consumers and other entities. 

Will the concerns they have raised likely slow that adoption and usage? 

More than likely is our thinking, but slower growth isn’t the same as a full stop or contraction. But in the near-term, the market is likely going to overreact, especially as we enter what tends to be one of the seasonally weakest periods for the market. As we’ve seen in the past, while painful in the near-term, it tends to eventually bring an opportunity. Later this week, we have the Dreamforce conference (September 15-17) and that should bring more insight for AI adoption and usage in the enterprise. 

2. In an exclusive interview with Fortune on Friday, he [Sam Altman] pointed out that the company has long maintained it’s not in a hurry to rush ahead with an IPO. “I actually think that, given everything happening with safety, right now would be an ill-advised moment to go public, and we don’t feel pressure on that,” Altman told Fortune Editor-in-Chief Alyson Shontell. He added that OpenAI will go public when the business is ready and when the company is ready as it relates to “what the moment is like in society with this technology…. When pressed on whether 2026 is off the table in favor of 2027, Altman replied, “I would say not 2026. Yeah, we got a lot of stuff to do, like meeting this moment of what is going to be required for safety and alignment, and how the industry and governments can work together.” (Fortune)

In recent months there as been speculation as to whether OpenAI would IPO this year or next, and Altman’s comment indicates that timing is now “after” 2026. Our view remains that an IPO remains a “when” not “if” event, and the pushed-out timetable should allow OpenAI to learn from Anthropic’s IPO and the market reception. While pushing out OpenAI’s IPO will lead to some investment banking fee tinkering, the upshot is for an another favorable year for IPO fees in 2027. We’ll have more to say on this later today. 

3. Anthropic is in talks to bring Nvidia as an anchor investor into what could be the largest IPO in history, two people familiar with the ‌matter told Reuters. Anthropic is seeking to raise as much as $100 billion that could value the artificial intelligence startup at around $2 trillion, the people said. Nvidia is considering investing up to $10 billion in the IPO, one of the sources added. The plans remain under discussion and could change, they cautioned, requesting anonymity because the discussions are confidential. (Reuters) Anthropic has selected the Nasdaq for its potential IPO, according to a person familiar with their plans. The company, which has been targeting an October listing, has given Nasdaq another big win, according to a person familiar with the matter. (Business Insider)

We’re not surprised that Nvidia (NVDA) is once again looking to flex it cash flow and balance sheet, and the pieces are coming together for Anthropic’s IPO, which should deliver massive investment banking fees. Once Anthropic’s S-1 filing lands at the SEC website, we’ll roll up our sleeves and dig through it looking for insights on the company, but also its product and spending plans. 

Morgan Stanley (MS) is the frontrunner for the primary “lead-left” position on the Anthropic IPO. Goldman Sachs (GS), Bank of America (BAC), Bank of New York Mellon Corp.’s (BNY) wealth unit, JPMorgan Chase (JPM),. and Wells Fargo & Co (WFC) have reportedly held discussions with Anthropic about providing wealth management services to its staff.

4. Oil pushed higher as Saudi Arabia’s closure of a major crude pipeline following attacks jolted the market, with the move disrupting a route that’s been key to bypassing the Strait of Hormuz during the US-Iran war. Brent rose as much as 3.9% to above $108 a barrel, before paring gains, while West Texas Intermediate was near $103. Saudi Arabia said late on Friday that it had halted the East-West pipeline as a precaution after attacks the previous day. There’s been no indication of when operations will resume. (Bloomberg)

5. Railroad fuel surcharges on U.S. grain shipments have more than doubled over the past year, rippling through the farm belt and raising transportation costs as many farmers also struggle with higher production costs. The average fuel surcharge rate on grain shipments climbed to 48 cents a mile per ‌rail car in the second week of September, up 153% compared with the weighted average a year earlier, according to U.S. Department of Agriculture data. Railroads use surcharges to recover most of what they have paid for fuel and combine them with long-haul freight rates. (Reuters)

6. The Federal Reserve will raise its interest rate on Wednesday and deliver at least one more hike by the end of March, according to a majority of economists polled by Reuters, reversing a fragile no-change consensus that prevailed before official data on Friday showed firm inflation… Now, an 85% majority of economists, 86 of 101, in the Reuters survey conducted after Friday’s inflation report said the Fed would raise rates by a quarter percentage point to 3.75%-4.00% at its September 15-16 meeting, the first increase since July 2023. That is a dramatic reversal of last week’s survey result showing more than two-thirds expecting a hold. (Reuters)

We’ll take these last three points together as the first two point to inflation tailwinds blowing harder, adding support for the market’s growing expectation for the Fed to deliver a rate hike Wednesday afternoon. Recent developments also increase the likelihood the Fed commentary will skew more hawkish.

We’ve talked about the market’s robust EPS growth expectations and the combination of calls to slow AI development, higher energy prices and their flow through and higher interest rates, strongly suggest some air will be let out of the S&P 500 EPS balloon for H2 2026 and 2027. Periods of expectation resetting can be painful, but it’s when the dust settles that opportunities to buy well-positioned companies at better prices emerge. That’s where our focus will be. 

7. Economic data today per TipRanks: There are no market moving economic reports published today. 

8. Companies reporting today per TipRanks: PM –  Dave & Buster’s (PLAY).

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At the time of publication, TheStreet Pro Portfolio was long BAC, MS, and NVDA.