Martin Gamble on US markets: AI safety alarm rattles investors

US stock markets were modestly lower this week, showing resilience against a raft of headwinds including higher oil prices, rising bond yields and AI safety concerns which, initially sent semiconductor chip stocks lower.

The Federal Reserve raised interest rates by a quarter of a percentage point as expected and signalled more hikes were likely.

A reversal in oil prices and bond yields after the Federal Reserve meeting saw stock markets back on the front foot, led by the technology-focused Nasdaq Composite, which gained almost 2%.

Power generation company Generac was one of the biggest gainers in the S&P 500 after announcing a $2.4 billion deal to supply Amazon data centres with generators.

Trucking firm JB Hunt was the biggest faller, losing around 12% after the company issued a profit warning due to the impact of rising diesel prices.

AI leaders sound the alarm

AI-related stocks had a rude awakening to the start of the week following a warning from Anthropic CEO Dario Amodei that increasingly autonomous AI agents could take control of much of the internet.

Amodei argued that the development of frontier models should be slowed down before it can cause too much damage, and he proposed installing an independent third-party monitoring system and international co-ordination.

OpenAI CEO Sam Altman and Elon Musk threw their weight behind Amodei saying the public is right to be afraid and that safety measures need to keep pace with the models.

Altman expressed confidence that the AI industry can manage the risks. Citing the current safety concerns Altman said the company would delay its IPO (initial public offering) to 2027.

In a separate development it emerged that OpenAI is in early discussions about a new private funding round which could value the ChatGPT maker at $1.2 trillion, roughly 40% above its March 2026 valuation.

Semiconductor stocks initially fell on fears of a slowdown in AI infrastructure spending before recovering later in the week after some analysts argued that deploying greater safety measures would require more spending.

Intel and SK Hynix reportedly in talks over manufacturing tie-up

South Korea’s SK Hynix, one of the leading AI-memory chip makers is in exploratory talks with Intel to find ways to manufacture on US soil for the first time, according to Reuters.

SK Hynix listed its shares on Nasdaq in July at $149 per share raising around $26.5 billion in the largest US public offering for a foreign company. News of the negotiations sent the shares up 5% this week to around $184, while Intel shares shot up nearly 10%.

One option on the table is for SK Hynix to lease part of a semiconductor manufacturing plant being constructed by Intel in Ohio which would give SK Hynix a footprint without having to build an entirely new facility itself.

Another option under consideration is a joint venture involving SK Hynix, Intel and major cloud companies. Intel would contribute infrastructure capabilities and SK Hynix would bring its memory capability expertise.

The cloud companies would effectively provide visibility and commitment on future memory demand. One potential sticking point is opposition from the Korean government due to sensitivity around the technology.

SK Hynix and Intel are not strangers, in 2025 the Korean company bought Intel’s NAND (a type of logic gate) and SSD (solid state drive) business for $9 billion.

Boeing sputters on growth runway

Boeing shares fell this week after CEO Kelly Ortberg said the planned increase in the production rates of the Boeing 737 MAX was taking longer than anticipated as the company struggled to make wings fast enough.

In addition, Boeing’s plan to increase production of the dual aisle 787 Dreamliner to 10 per month from eight is taking longer due to engine shortages.

The slower production cadence is likely to mean the company will only generate the mid-point of its free cash flow guidance of $2 billion instead of the upper $3 billion band, said chief financial officer Jay Malave.

After China committed to buying 200 jets in May, Industry analysts believe there is a decent chance of a follow-on order when President Trump meets Chinese President Xi Jinping in Washington next week.

Boeing shares are down around 7% year-to-date compared with a 12% gain for the S&P 500 index.