Dow Jones tumbles 600 points amid AI fears

US stock indexes declined on Thursday, driven by a renewed selloff in software and technology shares, while strong labor market data reduced expectations for interest rate cuts by the central bank.

Concerns about disruptions linked to artificial intelligence triggered sharp volatility on Wall Street during the current month, pressuring sectors including software, legal services, and wealth management, with the transportation sector emerging as the latest affected by those fears.

Despite that, at least one rate cut is still expected in June, though the probability that the Federal Reserve will keep borrowing costs unchanged has risen to nearly 40%, compared with 24.8% previously, following the release of jobs data on Wednesday, according to the CME Group’s FedWatch tool.

Additional economic data due this week could guide market movements, including the Consumer Price Index — a key measure of inflation — scheduled for release on Friday.

In trading, the Dow Jones Industrial Average fell by 1.2% (or 590 points) to 49,530 as of 18:07 GMT. The broader S&P 500 index declined by 1.2% (or 83 points) to 6,858, while the Nasdaq Composite dropped by 1.6% (or 375 points) to 22,690.