U.S. stocks close lower amid AI safety concerns, poor economic data

U.S. stocks ended lower on Tuesday as investor enthusiasm for AI encountered headwinds from emerging safety warnings and economic data weighed on broader market sentiment.

The Dow Jones Industrial Average fell 131.59 points, or 0.26 percent, to 51,349.92. The benchmark S and P 500 dipped 12.85 points, or 0.17 percent, to 7,670.84, the tech-heavy Nasdaq Composite Index shed 22.84 points, or 0.09 percent, to finish at 26,797.54.

Seven of the 11 primary S and P 500 sectors closed in negative territory, with energy and materials pacing the laggards by falling 0.89 percent and 0.55 percent, respectively. Bucking the downward trend, utilities and communication services led the gainers, advancing 1.14 percent and 0.4 percent, respectively.

The artificial intelligence sector faced renewed scrutiny following a Reuters report detailing a leaked draft initial public offering prospectus from AI developer Anthropic. The document revealed that the company is seeking a valuation of up to 2 trillion U.S. dollars while explicitly cautioning that advanced AI systems could pose existential risks to humanity. Concurrently, rival research lab OpenAI reportedly shelved the release of its latest frontier model following safety concerns identified during internal evaluation.

The broader market for public listings showed signs of strain amid surging government bond yields. Health technology firm Oura abruptly halted its planned market debut on Tuesday, citing heightened market uncertainty.

In commodity markets, crude oil benchmarks retreated as fears of supply disruption eased. Saudi Arabia resumed crude transport via its key East-West pipeline, while U.S. and Iranian representatives engaged through intermediary channels to restart diplomatic talks. Upon settlement, Brent crude for November delivery hovered near 102.6 dollars per barrel, while West Texas Intermediate crude traded at 89.38 dollars per barrel.

On the macroeconomic front, the Conference Board reported that U.S. consumer confidence dropped to its lowest level since 2014. In the labor market, the Job Openings and Labor Turnover Survey showed available positions fell to 7.097 million in August, down from a revised 7.335 million in July and trailing market forecasts of 7.228 million.

Meanwhile, borrowing costs continued to climb alongside elevated U.S. Treasury yields. The average rate on a benchmark 30-year fixed-rate mortgage jumped eight basis points to 7.58 percent on Tuesday, touching its highest level since November 2023 and adding further pressure to housing affordability ahead of Friday's monthly nonfarm payrolls report.

U.S. stocks close lower amid AI safety concerns, poor economic data

China's tourism sector is gearing up for a booming influx of international visitors as the National Day holiday kicks off on Thursday, driven by relaxed visa policies and soaring overseas interest.

In the southwestern province of Sichuan, curated boutique travel routes are offering international tourists immersive experiences, highlighting local attractions ranging from snow-capped mountains and giant pandas to intangible cultural heritage and local cuisine.

According to forecasts by the Sichuan General Station of Exit and Entry Frontier Inspection, the total volume of inbound and outbound travelers at Chengdu’s two major airports -- Tianfu and Shuangliu -- is expected to exceed 150,000 during this year's National Day holiday. The daily average throughput is projected at 21,000 travelers, with a peak daily volume of 22,000 expected on the first day of the holiday.

"This is my first time in China. I always wanted to visit China. I want to make a big trip in China. I'm in Chengdu right now and I want to see the pandas, and I also want to try Sichuan cuisine," said a tourist from Russia.

Meanwhile, eastern China's coastal hubs are experiencing a parallel boom. According to the Shandong General Station of Exit and Entry Frontier Inspection, ports across Shandong Province are expected to handle 142,000 inbound and outbound travelers during the holiday, marking a 27.3 percent increase year on year. Driven by the continuous policy dividends of China's expanding visa-free transit policies, cities including Jinan, Qingdao and Yantai are seeing peak travel flows. In Weihai, located at the eastern tip of the Shandong Peninsula, tourism momentum has carried over from the summer season, marked by a noticeable rise in travelers opting for ferry routes between China and South Korea. The dozen-hour maritime passage has emerged as a popular choice for tourists commuting between the two countries. "It is very convenient, the customs clearance process is smooth, and the staff are very enthusiastic. Weihai is very clean," said a tourist from South Korea.

China's border authorities are ramping up operational capacity to manage the heavy foot traffic.

"During the holiday, we have increased the number of inspection lanes, optimized duty arrangements, and deployed staff in advance to direct passenger flows. Meanwhile, we continue to implement measures to facilitate convenient customs clearance, ensuring efficient and smooth operations at the port," said Guo Xu, head of the first inspection team at the Weihai border inspection station.

China braces for inbound travel surge during National Day Holiday