[New York Stock Market Briefing] Stocks plunge on Trump tariff uncertainty and AI threats… Dow down 1.7%

The three major U.S. equity indexes in New York closed lower across the board. With fears persisting that artificial intelligence (AI) will encroach on the software sector, investor sentiment shrank sharply after U.S. President Donald Trump decided to raise global tariffs.

On the 23rd (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,804.06, down 821.91 points (1.66%) from the previous session. The Standard & Poor’s (S&P) 500 fell 71.76 points (1.04%) to 6,837.75, and the tech-heavy Nasdaq Composite slid 258.80 points (1.13%) to 22,627.27.

Trump’s move over the weekend to raise global tariffs to 15% stoked risk-off sentiment. More than the 15% figure itself, the market was further fatigued by the president’s impulsive actions.

On his Truth Social, Trump said, “If any country tries to play games with this ridiculous Supreme Court ruling, they will face tariffs higher than the tariffs we just agreed to, and even stronger measures than that.”

However, the European Union (EU) is not moving as Trump wants, deciding on the day to hold off on submitting for ratification in the European Parliament the trade agreement reached with the United States. There is also speculation that his imposition of a 15% global tariff for 150 days under Section 122 of the trade law may be legally vulnerable.

Angelo Kourkafas, chief global investment strategist at Edward Jones, said, “Raising global tariffs to 15% is not a major threat to the economy,” adding that he “recommends not overreacting to the headlines.”

Meanwhile, fears that AI could trigger disruptive innovation continued to weigh on investor sentiment. With Anthropic’s AI tool “Claude” recently becoming the software sector’s “public enemy,” cybersecurity stocks and IBM were hit on the day.

The move followed Anthropic’s rollout of a new security tool in a test version within the Claude AI model. Cybersecurity firm CrowdStrike plunged 10%, and Zscaler tumbled 10.31%. Netskope sank 12.06%, SailPoint dropped 9.37%, and Okta slid more than 6%.

IBM was not spared. Shares plunged 13% after Anthropic said “Claude Code can automate tasks such as structural analysis and documentation of COBOL code,” the computer language used by IBM systems. It marked the biggest one-day drop since October 2000.

Private equity firms with credit loans tied to various software assets also fell for days amid the AI-disruption narrative. KKR slid nearly 9% again, while Blackstone and Apollo Global Management fell 6.23% and 5%, respectively.

Fears that the AI-disruption thesis could drive a surge in white-collar unemployment—potentially followed by weaker consumption and a recession—also dragged down financial stocks. Visa fell 4.50%, Mastercard dropped 5.77%, and American Express plunged 7.20%.

By sector, financials slumped 3.33% and consumer discretionary fell 2.15%. Industrials, communication services and technology also fell more than 1%. By contrast, healthcare and consumer staples rose more than 1%.

Among mega-cap tech companies with market capitalizations above $1 trillion, only Nvidia and Apple rose. Companies with relatively smaller exposure to software and whose main profit drivers are hardware businesses held up even amid the AI incursion.

According to the CME FedWatch Tool, the federal funds futures market priced a 44.7% probability that the policy rate will be left unchanged through June. The figure was slightly lower than near the prior day’s close.

The Cboe Volatility Index (VIX) rose 1.92 points (10.06%) from the previous session to 21.01.

Ko Jeong-sam, Hankyung.com reporter jsk@hankyung.com