[New York Stock Market] AI Fears and Tariff Uncertainty... All Three Major U.S. Indexes Fall More Than 1%

Anthropic’s COBOL Automation Fuels Growing AI Fears
Software Sector Slides... IBM Plunges 13%
Uncertainty Over Trump’s Tariff Policy Persists
Tariffs Raised to 15% Over the Weekend

Poster the U.S. White House posted on X after U.S. President Donald Trump decided to impose a 15% tariff. White House X.

The three major New York stock indexes all fell by more than 1% on the 23rd (local time). The market was dominated by fears that artificial intelligence (AI) could replace software programming. Growing uncertainty caused by U.S. President Donald Trump over the weekend, as he raised global tariffs from 10% to 15%, also weighed on sentiment.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow) closed at 48,804.06, down 821.91 points (-1.66%) from the previous trading day. The large-cap S&P 500 Index fell 71.76 points (-1.04%) to 6,837.75, and the tech-heavy Nasdaq Composite Index ended at 22,627.27, down 258.79 points (-1.13%).

Among the top 15 companies by market capitalization, most finished lower. Only Nvidia, up 0.96%, Apple, up 0.71%, Walmart, up 2.41%, and Eli Lilly, up 4.56%, ended higher. Declines were notable in JPMorgan Chase, down 4.48%, Microsoft (MS), down 3.13%, Tesla, down 2.92%, Meta, down 2.67%, and Amazon.com, down 2.32%.

Fears that AI will erode the software sector had a major impact on the market. IBM shares plunged as much as 13.2% intraday. This was the largest intraday decline since March 2020.

On the day, Anthropic said via its Claude Code product that it can automate the modernization of COBOL systems. COBOL is a business programming language developed in the 1950s and is still running on IBM mainframes. IBM’s share price appears to have slumped on expectations that its mainframe and legacy modernization services, one of its core profit drivers, could be replaced by AI.

Concerns over AI also affected truck transportation and logistics, commercial real estate, and financial services sectors. Over the weekend, Citrini Research released a study warning that the AI boom could have a negative impact on the broader economy, amplifying fears. The report stated that the unemployment rate could rise to as high as 10% due to the AI boom.

In contrast, consumer staples showed a solid performance. Both Walmart and Procter & Gamble ended the session up more than 2%.

Tariff-related uncertainty from President Trump added to market fatigue. Through his social media, President Trump declared, "If any country tries to play games because of the Supreme Court’s outrageous decision, they will face even harsher tariffs."

This was interpreted as a warning to countries seeking to use the U.S. Supreme Court ruling to walk away from tariff agreements. On the same day, the European Parliament put on hold its approval of the trade deal signed last July between the European Union (EU) and the United States. Although South Korea, China, Japan, the United Kingdom, and others have each concluded separate trade agreements with the United States, uncertainty in the trade environment has increased.

Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, said, "The most important question is what will happen after this grace period," adding, "If tariff policy continues on its current path, there is a high possibility that the Supreme Court will have to rule on it again at the end of this year."

He added, "Tariff-related conflicts are likely to cause market disruption during the remainder of this year, but volatility is expected to be lower than during the initial shock last April."