S&P 500 futures are flat this morning prior to the opening of markets in New York after the index fell 1.57% yesterday as traders fled from stocks exposed to AI. The market is now in negative territory for the year.Tech stocks led the decline yesterday, with the Nasdaq Composite down 2%. The S&P 500’s software sector is down 27% since October, according to the Financial Times, which gives you an idea of how worried investors are that AI will simply replace software makers. Gold—which is supposed to be a safe haven—took a sharp dip yesterday, an indicator that traders just want their cash out of assets generally. It’s back under $5,000 per troy ounce.Asia had a tough day—Japan’s Nikkei 225 was down 1.21%, and China’s CSI 300 was down 1.25% at the close this morning. But markets in the U.K. and Europe were flat-to-up, suggesting sellers may be taking a breather today.
A karaoke machine maker wipes billions off trucking stocks
It’s not just tech stocks that are in the crosshairs. Losses were imposed on non-tech companies too, as investors became paranoid about how much damage AI might inflict upon sectors like trucking, real estate, and finance.
Perhaps the wildest example of the rout was Algorhythm Holdings, a small trucking logistics company that also sells karaoke machines. The company said its SemiCab AI platform “helped customers scale freight volumes by 300% to 400% without a corresponding increase in headcount,” according to Jim Reid and his team at Deutsche Bank. “The Russell 3000 trucking index fell –6.64% as companies of all sizes reacted to the news.”
