FBI seizing evidence at California plant where chemical tank overheated and forced evacuations

LOS ANGELES (AP) — Federal authorities served a search warrant on Wednesday at a Southern California aerospace facility where a chemical tank overheated last month, forcing 50,000 residents to evacuate because authorities feared a catastrophic explosion.

The warrant signed by a federal judge last week approved the seizure of documents and records related to the “storage, use, or disposal” of methyl methacrylate, the chemical inside the affected tank.

“Samples of the substance within any tank, tote, drum, vat, vessel, or container suspected of containing or having previously contained methyl methacrylate and/or any hazardous substance” were also sought, according to the warrant.

The warrant also orders agents to seize records related to “any cooling equipment or other equipment used to control or regulate the temperature of methyl methacrylate.”

The FBI confirmed its agents were searching GKN Aerospace Transparency Systems in the Orange County city of Garden Grove. Multiple vehicles and several federal agents were seen outside the facility Wednesday morning.

GKN Aerospace makes cockpit windows, canopies and windshields. The tank that overheated contained 6,000 to 7,000 gallons (22,700 to 26,500 liters) of methyl methacrylate, which is highly flammable. The liquid is used in the manufacturing of plastics and coatings, such as Plexiglas and dental prosthetics.

Exposure to the chemical can cause serious respiratory problems, neurological issues and irritation to the skin, eyes and throat, according to the Environmental Protection Agency.

The chemical that overheated is still in the holding tank, according to the Orange County Health Care Agency, which is leading the site cleanup and waste removal efforts.

The agency had planned to pump the neutralized methyl methacrylate from the storage tanks into sealed trucks for transport and disposal starting at the end of last week, according to a press release on the agency’s website. But on Friday, they said the removal didn’t happen “due to unavailable resources.”

Once a new date is confirmed, they will provide advance notice to the community.

Responding to a request for comment on the FBI investigation, a GKN spokesperson told the AP on Wednesday morning: “We are cooperating with authorities at our Garden Grove facility and will continue to do so.”

GKN Aerospace’s Steve Carlin spoke at a community meeting Tuesday evening. He thanked the firefighters and local leaders who responded to the incident at the plant that employs more than 500 people, and apologized to the community.

“On behalf of GKN and the Garden Grove plant I want to say that I’m sorry that this event and this incident occurred. I understand and I realized sitting here tonight what a disruptive event it was and how unsettling it is to the greater community. Particularly unsettling to us at GKN because of the long history that we have with Garden Grove and how connected we are to this community.”

Garden Grove city leaders and residents urged GKN Aerospace to consider moving these tanks of methyl methacrylate off of the Garden Grove plant, so the chemical would be far away from residents and businesses. But Carlin said it is very early in the investigation into what happened, so it is too soon to decide what the company might do in response to the incident. He promised to be transparent with the community about the investigation.

The incident was reported on May 21 and evacuations began the next day. The tank overheated because a valve on the cooling system that kept it at 50 degrees Fahrenheit (10 degrees Celsius) failed, officials said.

Crews sprayed water on the tank until the interior temperature stabilized to 92 F (33.3 C), down from 100 F (37.7 C). A sprinkler system was used to douse the tank, and the company said its technical specialists and firefighters removed insulation from the tank to help cool it.

A crack that formed by chance on the tank relieved pressure and helped avert a catastrophic explosion, allowing most evacuees to return home over the Memorial Day weekend. Authorities announced they were lifting the final orders after the temperature on the tank remained stable for four hours without intervention from sprinklers.

Separately, the Orange County District Attorney’s Office also is conducting a criminal investigation into the GKN Aerospace plant, according to DA spokesperson Kimberly Edds.

“We have sent a preservation letter to GKN directing them not to modify or destroy any evidence, which the company’s outside counsel confirmed receipt,” Edds told The Associated Press in an email.

About a dozen people and businesses that were among the 50,000 evacuated during the chemical emergency have filed lawsuits against the company. Some residents reported strong odors, respiratory irritation, headaches and dizziness. They question why the chemical plant was allowed to operate so close to homes.

Lawyer Rickard McCune represents Big Rob’s Pizzeria and Fruit Caboose Concessions in a federal lawsuit claiming GKN Aerospace and parent company Melrose Industries were negligent and put the surrounding communities at risk. He said they’re pleased the federal government is investigating. The FBI’s involvement will help bring justice to those who were harmed, he said.

Another lawyer, Alex Wheeler, represents Dinh Tran and Drippys Gourmet Ice Cream Sandwiches and said they’re relieved that the FBI is using its resources to investigate potential criminal acts.

“As more information becomes public, it’s becoming clearer and clearer that the risk to our community posed by GKN’s operation of the Garden Grove facility may require a long term and lasting solution,” Wheeler said.

GKN did not immediately respond to the allegations in the lawsuits.

Orange County health officials assured residents that no contamination or fumes were released, and that they would keep monitoring the air for several months and checking the sewer and storm drains.

The California incident was the first of two major hazardous chemical emergencies on the West Coast within a week of each other. Five days after the GKN Aerospace situation began, a large tank containing a corrosive chemical at a Longview, Washington paper mill ruptured and imploded, killing 11 people.

Bellisle reported from Seattle. Associated Press journalist Josh Funk in Omaha, Nebraska, contributed.

Ariel view of the chemical tank at GKN Aerospace in Garden Grove, Calif. on Wednesday, June 10, 2026. (AP Photo/William Liang)

Ariel view of the chemical tank at GKN Aerospace in Garden Grove, Calif. on Wednesday, June 10, 2026. (AP Photo/William Liang)

Ariel view of the chemical tank at GKN Aerospace in Garden Grove, Calif. on Wednesday, June 10, 2026. (AP Photo/William Liang)

FBI agents stage at GKN Aerospace in Garden Grove, Calif. on Wednesday, June 10, 2026. (AP Photo/William Liang)

Ariel view of the chemical tank at GKN Aerospace in Garden Grove, Calif. on Wednesday, June 10, 2026. (AP Photo/William Liang)

NEW YORK (AP) — Another sell-off for artificial-intelligence stocks helped drag the U.S. market sharply lower Wednesday, as Wall Street’s former superstars continue to face heavy scrutiny for their success.

The S&P 500 dropped 1.6% for its first back-to-back drop in three weeks and is back to where it was in early May. The Dow Jones Industrial Average tumbled 953 points, or 1.9%, and the Nasdaq composite led the market lower with a 2% slide.

Wall Street has been shaky since last week, when AI stocks went from roaring to records to suddenly turning lower. Among the worries is that their prices have simply shot too high, too fast because of AI mania. The question now is whether the break lower has cleared out excessive optimism that may have built into their stock prices, or if it’s the start of a longer downturn.

Super Micro Computer, which sells AI servers, tumbled 28% after saying late Tuesday that it plans to raise $7 billion in cash by selling shares of stock and convertible preferred stock. Such moves raise the most money for companies when their stock prices are high, and they can dilute the ownership stakes of existing shareholders.

Micron Technology swung from an early loss of nearly 4% to a modest gain and back to a loss of 4.7%. It’s coming off a wild stretch where it sank 7.7% last Thursday, then plunged another 13.3% Friday and rallied 9.9% Monday. Despite all the swings, the computer memory maker’s stock is still up 212.5% for the year so far.

Nvidia, the chip company that’s grown into a nearly $4.9 trillion behemoth because of the AI boom, was the heaviest weight on the S&P 500 after falling 3.7%. The second-heaviest was another AI winner, Broadcom, which fell 5.1%.

Some of the pressure on AI stocks could also be coming from investors pulling cash out to prepare for high-profile debuts on the U.S. stock market for several AI giants. SpaceX’s initial public offering could come later this week, for example.

Weakening stocks for companies with big fuel bills also pulled the market lower. United Airlines sank 6.2%, and cruise-operator Carnival fell 6.3% after oil prices rose due to the latest fighting in the war with Iran.

The price for a barrel of Brent crude oil rose 1.8% to $93.10 after President Donald Trump warned Iran would “pay the price” for stalled negotiations between the two on their war. The war has been keeping the Strait of Hormuz effectively shut to oil tankers, which has prevented the delivery of crude from the Persian Gulf to customers worldwide.

High oil prices have sent inflation higher, and a report on Wednesday showed that prices for U.S. consumers jumped in May at the highest speed in three years.

But Treasury yields nonetheless held relatively steady in the bond market because the figures were pretty much exactly what economists had forecast. The rise in an important underlying measure of inflation, meanwhile, was not as bad from April through May as economists expected.

The yield on the 10-year Treasury edged up to 4.54% from 4.53% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do with its overnight interest rates, held at 4.13%.

Traders have been building bets recently that the Fed will have to hike its main interest rate at least once this year, given how high inflation is and how strong the U.S. job market remains. Wednesday’s inflation update didn’t sway them much, according to data from CME Group.

High yields can slow entire economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. They hit investments seen as the most expensive in particular, and some critics are calling AI a bubble where investment inflated too far.

All told, the S&P 500 fell 119.66 points to 7,266.99. The Dow Jones Industrial Average dropped 953.33 to 49,918.78, and the Nasdaq composite sank 509.32 to 25,169.50.

In stock markets abroad, indexes in Europe were mixed following sharper drops in Asia.

South Korea’s Kospi tumbled 4.5%, hurt by losses for tech giants Samsung Electronics and SK Hynix.

Tokyo’s Nikkei 225 sank 1.9% after data showed Japan’s producer price index, a measure for prices at the wholesale level, rose in May at the fastest pace in more than three years. Shares of technology and telecommunications giant SoftBank Group, which has a strong AI focus, lost 8.3%.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.

Options traders Steven Rodriguez, left, and Marty Handler work on the floor of the New York Stock Exchange, Wednesday, June 3, 2026. (AP Photo/Richard Drew)

Options trader Ravi Bhandari works on the floor of the New York Stock Exchange, Wednesday, June 3, 2026. (AP Photo/Richard Drew)

Currency traders pass by a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Wednesday, June 10, 2026. (AP Photo/Ahn Young-joon)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Wednesday, June 10, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Wednesday, June 10, 2026. (AP Photo/Ahn Young-joon)