As of 11:37 AM ET, the Dow Jones Industrial Average (DJINDICES:^DJI) is down 0.88% to 51,962, the Nasdaq Composite (NASDAQINDEX:^IXIC) has fallen 0.73% to 25,996, and the S&P 500 (SNPINDEX:^GSPC) is trading 0.45% lower at 7,586 as concerns over high energy costs and AI scaling pressure indexes.
Gold is trading at $4,286.84, down 0.33%, while the 10-Year Treasury yield is up 0.03% to 4.99%. Sector-wise, communication stocks are the top gainer, with a sharp decline in industrials and weakness in consumer cyclicals.
Nvidia, Intel, and Micron Technology all gained slightly this morning as investors reassessed doomsday scenarios for artificial intelligence (AI). Cryptocurrency stocks, including Coinbase Global and Robinhood Markets, dropped ahead of a Senate vote on key legislation.
The 10-year Treasury yield reached its highest level since 2007 overnight, as the global bond sell-off resumed. High treasury yields, rising oil prices, and AI jitters all weighed on markets this morning as a cautious tone took hold. Markets are evaluating the potential impact of tightening economic conditions, particularly higher borrowing costs, on company earnings.
Although a couple of big tech stocks erased some of yesterday's losses, the Nasdaq still fell as fears of an AI slowdown were compounded by a growing certainty that the Federal Reserve will increase interest rates. AI warnings from tech leaders can be unnerving, but try to zoom out and look beyond the noise -- quality stocks with strong fundamentals and forecasts based on real demand will be well-positioned to withstand any short-term storms.
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Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Intel, Micron Technology, and Nvidia. The Motley Fool recommends Coinbase Global and HDFC Bank. The Motley Fool has a disclosure policy.