US MARKET CLOSE | Major Indexes Fall as AI IPO Fears and Rising Oil Prices Weigh; Nvidia Drops Over 3%

US stocks closed lower on Monday as concerns over AI safety spurred major uncertainty in the AI IPO space, compounded by the latest moves in oil prices, according to Sina Finance. The Dow fell 0.29%, the S&P 500 dropped 0.48%, and the Nasdaq declined 0.56%. Among the "Magnificent Seven," Meta Platforms rose 2.71%, Google gained 3.06%, Microsoft added 1.97%, and Apple edged up 0.24%, while Tesla fell 1.77%, Amazon lost 1.26%, and Nvidia dropped 3.36%. The most immediate risk for the market is that the billions of dollars in spending underpinning the AI boom could slow, a concern that intensified after OpenAI's Altman said the company would not pursue an initial public offering this year due to safety concerns. Kathleen Brooks, head of research at XTB, called it a very rare unified signal from a group of tech CEOs that was weighing on AI trades in early trading, and questioned whether the warnings meant hyperscale AI compute and infrastructure buildout was nearing an end. Chris Armstrong of Berenberg said irrational exuberance seen in midsummer was being squeezed out, marking a further stage of lowered market expectations. Elsewhere, Saudi Arabia shut a key pipeline that can bypass the Strait of Hormuz, pushing oil prices higher; US WTI crude futures rose 4% to break above $104 a barrel, and Brent crude gained 4% to top $109. US crude prices had broken past the $100 mark last week amid escalating Middle East conflict. The Federal Reserve will hold its September monetary policy meeting this week. According to the CME FedWatch tool, federal funds futures traders priced the probability of a Fed rate hike at about 88%, and following higher-than-expected US consumer inflation data released last Friday, traders now see the odds of a Wednesday hike at close to 90%, which would be the Fed's first hike since mid-2023. The European Central Bank raised rates last week and signaled possible further hikes if inflation continues to climb. Government bond yields edged higher, with the global bond market posting its worst week since mid-May. The benchmark 10-year US Treasury yield is approaching 5%, set to reach its highest since 2023, while the German 10-year yield broke above 3.53%, its highest since 2009. European indexes closed mixed, with the Stoxx 600 down 0.48%, the UK FTSE 100 up 0.4%, Germany's DAX down 0.6%, and France's CAC 40 down 0.78%. In Asia, Japan's Nikkei 225 fell 0.81%, South Korea's Kospi tumbled 3.26%, Australia's S&P 200 rose 0.10%, and mainland China's CSI 300 closed down 0.67% at 4480.08.