In today’s market, which is overly weighted toward technology stocks and highly sensitive to the prospects of artificial intelligence, even the slightest disturbance can trigger significant stock price volatility.

But nothing better illustrates the current sensitivity of the stock market than what happened on Monday — when the Dow Jones Industrial Average plummeted by 800 points, partly driven by a 7,000-word hypothetical scenario analysis.

A widely circulated report issued by Citrini Research touched on a new fear in the market regarding artificial intelligence: it painted a bleak picture of the future in which technological change would lead to a ‘race to the bottom’ for white-collar knowledge work. Concerns about overspending by hyperscale companies are outdated, and fears about disruptions in the software industry fall far short. A ‘global intellectual crisis’ is looming.

A new and broader question arises: What if artificial intelligence becomes so beneficial to the economy that it actually turns into a negative?

Throughout modern economic history, human intellect has been a scarce input factor,” Citrini wrote in an article describing a June 2028 scenario (not a prediction). “We are now witnessing the collapse of this premium.”

Many of Monday’s market moves broadly aligned with the scenario outlined by Citrini: rapidly advancing AI tools enabling cost cuts across industries, triggering mass unemployment among white-collar workers, and subsequently leading to the spread of financial risks.

Shares of software companies Datadog, CrowdStrike, and Zscaler all plunged more than 9%. International Business Machines fell 13%, marking its worst single-day performance since 2000. American Express, KKR, and Blackstone Group — companies specifically mentioned by Citrini — also declined.

This anxiety, coupled with renewed uncertainty over trade policy in Washington, dragged down major indices on Monday. The Dow Jones Industrial Average led the decline, falling by 1.7%, or 822 points. The S&P 500 dropped by 1%, and the Nasdaq Composite retreated by 1.1%.

In recent weeks, concerns over AI-driven disruption have swept through the software, private credit, insurance, and wealth management sectors. Earlier this month, transportation stocks experienced one of their worst days after a former karaoke machine manufacturer touted simplifying trucking operations using new AI tools. Many of these stocks soon recovered most of their losses, leading some investors to believe the market was somewhat ‘overreacting.’

Jordan Rizzuto, Chief Investment Officer at GammaRoad Capital Partners, stated that pricing related to AI-driven disruption is ‘happening faster than most people expected.’ ‘That’s the nature of accelerating technology.’

Although investors continued to rotate funds into sectors such as energy and consumer staples on Monday, these sectors have relatively small weightings in major indices. Rizutto also pointed out that the growing popularity of defensive strategies might indicate Wall Street is becoming more cautious about the road ahead. ‘You need to be careful about what kind of rotation you’re expecting,’ he said.

Over the weekend, Trump announced that he would raise the new global tariff rate aimed at replacing multiple import taxes, which were ruled illegal by the Supreme Court last week, to 15%. While this injected more uncertainty into trade agreements or ongoing negotiations, many analysts believe its economic impact will be relatively limited.

Edward Jones investment strategist Angelo Kourkafas said, ‘We advise investors not to overreact to headlines.’

Nevertheless, individual companies waiting for potential tariff rebates or planning new investments may not be spared. Trade-sensitive stocks, such as American Eagle Outfitters, Ralph Lauren, and Yeti Holdings, fell on Monday. Logistics and transportation companies were also affected, dragging the Dow Jones Transportation Average down by 2.8%.

The bond market rallied as investors flocked to safer assets. The yield on the 10-year U.S. Treasury note closed at 4.026% on Monday, marking the lowest closing level since the end of November. Precious metals also resumed their upward trend. Near-month gold futures rose 2.9% to $5,204.70 per ounce, while silver prices increased 5.2% to $86.52 per ounce.

Monday’s market volatility extended recent fluctuations related to artificial intelligence. Citrini, a small research firm with a large following on Substack for its macro and thematic equity research, noted in its latest article that software companies, payment processors, and others formed ‘a long, interconnected chain of bets around white-collar productivity growth’ that AI was about to disrupt.

Private credit firms, which have provided massive loans to the technology sector in recent years, were among the sectors hit on Monday. Blue Owl fell 3.4%, while Apollo Global Management dropped 5.6%. Lenders ranging from Wall Street’s largest banks to regional banks also faced sell-offs.

From a credit perspective, the key risk lies in the speed of disruption, not whether the disruption exists, UBS analysts recently stated in a report to clients. ‘A rapid shock occurring within 12 months could breach contractual protections, but we believe a multi-year adjustment is far more likely.’

DoorDash shares also plunged 6.6% on Monday after a Citrini Substack article described the food delivery app as a ‘prime example’ of how new tools could upend companies that profit from human friction. In the research firm’s scenario, AI agents would assist drivers and customers with deliveries at much lower costs.

DoorDash co-founder Andy Fang responded to Citrini on social media on Monday, stating that the rise of ‘agent-based commerce’ would require his company to adapt to meet the needs of AI agents and real-world merchants. ‘The ground beneath our feet is shifting,’ he wrote. ‘The entire industry needs to adapt to this.’