Stocks dented by AI warnings; oil jumps again

By Amanda Cooper

LONDON, Sept 14 (Reuters) - Global stocks fell on ‌Monday, driven lower by a ​slide in ​AI shares, as investors were unnerved by another surge in the oil price ahead of likely interest-rate hikes in the United States and Japan this week.

AI-linked shares took an added hit after the leaders of OpenAI and Anthropic called for a slowdown in development to manage ‌risks and protect humanity.

Oil futures rose by nearly 3% after new strikes on Saudi Arabia and on ships in the ⁠Gulf, on top of an attack on a Saudi oil pipeline, while a meeting in Oman between Iran and Gulf Arab states to discuss opening the Strait of Hormuz was postponed.

Friday's U.S. consumer ‌inflation report came in hotter than expected and ‌traders now attach a near-90% chance of the Federal Reserve raising rates on Wednesday, in what would be its first hike since mid-2023. The European Central Bank raised rates last week and indicated more may follow if inflation picks up.

"There's been no real equity-market drama in the face of 5% ​yields and high oil prices. But, clearly, one thing we have to add to the mix is that if the disruption in Hormuz continues, we’re going to have to add a couple of hikes by central banks, which is what the market is pricing," Lombard Odier chief economist Samy Chaar said.

"The ⁠Fed is more impatient than it was, and central banks are more impatient than they were, the ECB included. They're not just going to let time do its work. They want to get ahead of ​it," he said.

OIL PRICE SPIKE

Brent futures were last up 2.6% at $107.3 a barrel, having gained almost 9% last week. Prices for diesel, gasoline and jet fuel are all far higher than they were before the war, meaning a direct ​hit for consumers.

In Europe, the STOXX 600 was down 0.2% as gains in oil and ‌gas stocks were offset by losses in tech, which were swept lower after the concerns expressed in a letter by Anthropic CEO Dario Amodei, echoed by Elon Musk, who runs xAI, and Sam Altman, CEO of OpenAI.

For markets, the immediate risk is ⁠that of a slowdown in the billions of dollars being spent on the AI boom, particularly after Altman also said his company would not proceed with an IPO this year, citing safety concerns.

"This is a highly unusual unified message from a group of tech CEOs, and it is weighing on the AI trade this morning," XTB research director Kathleen Brooks said.

"Is ⁠this warning about AI a sign that hyperscaling AI compute and infrastructure has reached its endpoint? If so, this will have massive repercussions for financial markets, and it could also ​lead to a sharp selloff in chip stocks and other components of the AI trade at the start of the new trading week."

S&P 500 futures fell 0.6%, while Nasdaq futures fell 1.5%, reflecting the premarket slide in shares of AI staples such as Marvell, Intel and Micron, which fell between 5.5% and 7%.

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Government bond yields, which ‌posted their worst weekly performance since mid-May last week, edged higher. Yields on benchmark 10-year Treasuries are on the verge of hitting 5%, the most since 2023, while German 10-year yields topped 3.53% to reach their highest since 2009.

Markets ‌also imply around a 76% chance the Bank of Japan will lift its cash rate by a quarter point, to 1.25%, when it meets on Friday. The BoJ also is expected ⁠to signal further tightening could take place as it struggles to support ‌the yen, after market intervention helped to pull ​it from a 40-year low.

The dollar rose 0.6% to 154.46 yen, having fallen around 4% over the last two weeks and below a July peak of 163.99. The euro was 0.5% lower at $1.1543.

(Additional reporting by Wayne Cole; Editing by Edmund Klamann, Sonali Paul ‌and Alex Richardson)

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