The market is so on edge about AI that it's selling off Monday on an unlikely source

CNBC Finance

4 min read

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch â an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets are selling off on Monday due not only to concerns that artificial intelligence will displace enterprise software companies like Salesforce and ServiceNow, but also from the potential long-term negative ramifications it could have on the labor market and broader economy. The latest concerns stem from perhaps an unlikely source: Over the weekend, a research firm published a thought-provoking, though fanciful, take on the future of AI and how it could devastate many more industries than traditionally considered in the blast zone, such as credit-card companies and delivery apps. We think this report is an alarmist hypothetical and not a realistic base case, but the market doesn't want to wait around to find out. Just look at shares of American Express and DoorDash down roughly 7% apiece. The sell-off shows how sensitive the market is to AI disruption headlines, and it exemplifies the "shoot first, ask questions later" attitude investors currently have. The tariff backdrop is now unsettled in the wake of Friday's Supreme Court decision. Over the weekend, President Donald Trump lifted the global tariff rate to 15% from 10% and later on Monday warned on Truth Social that countries could face even higher duties. The combination of multiple uncertainties is resulting in a pullback in stocks most levered to the economy â the financials, consumer discretionary, and the industrials, while investors rotate into more resilient sectors like consumer staples and health care. Eli Lilly is our best performer in Monday's session, up about 4%, as its lead in the obesity race grew even wider thanks to a disappointing trial from rival Novo Nordisk. Back in May , Honeywell announced it was buying Johnson Matthey's catalyst technologies business for Â£1.8 billion in cash. In simple terms, the catalyst technologies unit sells chemicals that are used in the industrial manufacturing process. Honeywell said Monday those deal terms have changed. The deal will now be for a total consideration ofÂ Â£1.325 billion, a 26% reduction equal to roughly $640 million. It's not completely unusual to see deal terms change months after a transaction is announced. The reason is typically because something has changed in the industry and business conditions that make the original deal assumptions a lot less attractive. That's what happened here, with Johnson Matthey saying the updated terms reflect the catalyst technologies business performance during 2025 and 2026, "which includes the deferral of key sustainable solutions licensing projects and reduced profitability from the supply of catalysts due to the challenging market environment." Despite these headwinds, Honeywell said it expects the acquisition to be accretive to its adjusted earnings per share in the first full year of ownership. Up next , after the closing bell, we will get earnings from Hims & Hers Health , Diamondback Energy , and Keysight Technologies . A few notable companies reporting before the opening bell Tuesday are Club name Home Depot , NRG Energy and Amer Sports . On the data side, the Conference Board is set to release the February edition of its consumer confidence survey at 10 a.m. ET. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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The market is so on edge about AI that it's selling off Monday on an unlikely source

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