Stocks fell on Thursday as investors began to worry about the downside of the rise of artificial intelligence, which threatens to disrupt the business models of entire industries and increase unemployment.
The Dow Jones Industrial Average lost 669.42 points, or 1.34%, to end at 49,451.98. The loser of the day was Cisco Systems, which fell 12% after the maker of networking hardware such as switches and routers posted disappointing guidance for the current quarter. The S&P 500 fell 1.57% to close at 6,832.76, while the Nasdaq Composite lost 2.03% to end at 22,597.15.
Certain parts of the stock market have been hit this year by the release of AI tools that could replicate their business — or at least cut into their profit margins.
Financial stocks such as Morgan Stanley have come under pressure amid fears that AI will disrupt the asset management business, while shares of freight and logistics companies such as CH Robinson have fallen 14% on fears that AI will simplify freight transport, affecting certain revenue lines, SEEbiz reports.
Fears of AI disruption have spread to the real estate sector, hurting stocks like CBRE and SL Green Realty, on the idea that higher unemployment will affect demand for office space.
Software stocks – a group that has been hit by disruption concerns in recent weeks – extended their annual losses during the trading day. Shares of Palantir Technologies fell nearly 5%, bringing their decline this year to more than 27%. Autodesk shares are down nearly 4%, and the stock’s year-to-date decline is now about 24%. The iShares Expanded Tech-Software Sector ETF (IGV) fell nearly 3%. The fund is now about 31% below its recent high after entering a bear market for the first time last month.
