Equities: AI slowdown fears hit chip stocks – Deutsche Bank

Deutsche Bank’s Jim Reid reports that US equities weakened as AI slowdown headlines triggered a sharp selloff in semiconductor names, dragging the broader S&P 500 lower. The Philly Semiconductor Index suffered its worst day since July, while political commentary from President Trump briefly supported sentiment before stocks closed near session lows, underscoring fragile risk appetite in September.

Chip-led weakness weighs on equities

"So it was another session where September lived up to its reputation as the worst month of the year for asset performance, with bonds and equities continuing to struggle."

"As all that was going on, there was a big selloff in chip stocks yesterday after the weekend calls for some kind of AI slowdown. So the Philly semiconductor index (-5.86%) had its worst daily performance since July."

"President Trump again pushed back against the prospect of an AI slowdown, as he had initially on Sunday, saying yesterday that the US already had “tremendous CRIMINAL and REGULATORY power over these companies!” And then in a separate post, he said that “the United States is leading, by a lot, every other country. Don’t kill the Golden Goose!” While this helped chip stocks recover a bit, they were back near the day’s lows by the close."

"That slump helped to drag US equities down more broadly, with the S&P 500 (-0.48%) seeing a decent fall, despite a narrow majority of companies in the index rising on the day. In Europe, the STOXX 600 (-0.49%) registered a similar loss."

"Markets are lower again in Asia, but losses are relatively contained. As I check my screens, the S&P/ASX 200 (-0.89%), the KOSPI (-0.71%), the Hang Seng (-0.23%) and the Nikkei (-0.16%) are all in negative territory with mainland Chinese stocks just on the negative side. US equity futures are down a couple of tenths of a percent with European futures flat."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)