Investors shifted to defensive stocks such as Johnson & Johnson, Costco, and CrowdStrike on Monday amid concerns about artificial intelligence security. The increased interest in these assets came after Dario Amodei, CEO of Anthropic, called for a slowdown in the development of new AI models. This event coincided with the S&P 500 and Nasdaq indexes beginning to recover after a sharp decline, as treasury bond yields fell after reaching 5%. Meanwhile, ahead of the upcoming Federal Reserve meeting, inflation concerns are growing, and the chances of a rate hike remain above 92% according to the CME FedWatch tool.
Stocks such as Johnson & Johnson and Eli Lilly are showing growth in the pharmaceutical sector, while Kimberly-Clark and Costco also posted positive results in the consumer goods sector. These defensive stocks generally withstand economic stresses better compared to high-risk tech names. The increased interest in such companies is also linked to easing pressure from high-tech sectors, as investors suggest that slowing AI development may reduce the need for capital investments and long-term borrowing.
In particular, shares of CrowdStrike and Palo Alto Networks rose by 14% each, reflecting the view that concerns about AI security strengthen the need for cybersecurity spending. Investors also noted the potential benefits of slowing AI growth, which may provide time to build up cash reserves. However, among tech companies such as Meta Platforms, Alphabet, and Microsoft, there is growth as the slowdown in AI development makes it easier to cope with financial pressure. Overall, the public agenda on AI security is currently playing a significant role in shaping market sentiment.
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