New York's AI Fears: Gold, Consumption, and Commodities Move in Opposition

On the 3rd (local time), U.S. equity markets closed lower amid a tech-led sell-off. The S&P 500 fell 0.84% to 6,917.81, the Nasdaq plunged 1.43% to 23,255.19, and the Dow dipped 0.34% to 49,240.99. Having recently traded near all-time highs, stocks came under renewed valuation pressure. (sharecafe.com.au)

At the core of the pullback was concern that AI could encroach on traditional software businesses. Reports of a new AI-driven legal tool added to the selling pressure, driving broad weakness in mega-caps such as Microsoft and Nvidia, as well as software names like Salesforce and ServiceNow. By contrast, Palantir surged over 6% on strong AI-related demand, while PayPal plunged nearly 20% amid disappointing results and a CEO change—highlighting a clear differentiation among growth stocks. (thestar.com.my)

Macroeconomic indicators were actually positive: January’s ISM Manufacturing PMI returned to expansion at 52.6—the first such reading in a year—yet equities saw little benefit. A partial U.S. federal government shutdown delayed employment data, sustaining uncertainty over the Federal Reserve’s policy path and dampening investor sentiment. (riotimesonline.com)

In global and commodity markets, the “safe-haven vs. inflation” theme reasserted itself. After sharp declines, gold and silver rebounded about 6% and 8% respectively in a single session, while oil rose roughly 2% amid Middle East tensions and a softer dollar. Conversely, Bitcoin fell to its lowest level since 2024, reflecting a shift from speculative to defensive assets. (local10.com)

By sector, funds rotated out of technology into consumer staples and select financials. Walmart gained about 3%, becoming the first retailer to eclipse a $1 trillion market cap on optimism over its integrated online-offline strategy. For investors, this correction offers a timely chance to validate AI and software earnings, reassess interest-rate and policy risks, and review portfolio diversification in light of commodity volatility. (sharecafe.com.au)