Meta's AI assistant Muse is driving technology stocks to record highs, while consumer and financial stocks are under pressure

Meta's new AI assistant Muse is lifting technology stocks to new highs. There are also concerns that entire industries could be upended by this. High oil prices and concerns about the Fed's next interest rate hike are dampening buying sentiment.

Enthusiasm for artificial intelligence (AI) has brought the US technology exchange Nasdaq to a record high for the second day in a row. While chip stocks benefited from the strong response to Meta's new AI assistant "Muse", consumer-related stocks and financial stocks came under pressure.

The Dow Jones index of standard stocks closed 0.36 percent lower at 51,863 points. The broader S&P 500 stood still at 7,764 points, just below its record high of August 13th. The Nasdaq index rose by 0.45 percent to 27,244 points. Trading volume on U.S. exchanges was high, with 17.9 billion shares traded, compared to the past 20-session average of 16.3 billion.

The focus of investor interest was the meta-assistant Muse, which was introduced in September and can send emails and complete transactions on behalf of users. This boosted AI-related semiconductor stocks: shares of Micron advanced five percent, Sandisk gained almost seven percent. At the same time, however, there was growing concern that the software could compete with retailers, online brokers and other consumer-related companies.

Amazon blocked the agent from shopping on its platform on Monday. Many technology stocks suffered because of one fear or another related to Muse, said Jed Ellerbroek, portfolio manager at Argent Capital Management. People feared that in the future the AI ​​would also manage insurance, book trips and search for products. Papers from the ride-hailing companies Uber and Lyft each fell by more than one percent. Airbnb lost three percent and the online broker Charles Schwab lost six percent. The major banks JPMorgan and Wells Fargo each fell by more than three percent.

Fed interest rate policy in the focus of investors

Aside from technology stocks, geopolitical tensions caused restraint. The price of oil hovered around the $100 per barrel mark. The yield on ten-year US government bonds remained at a relatively high 4.94 percent. US President Donald Trump had previously warned in a speech to the UN General Assembly that he could destroy Iran if there was no agreement to end the Middle East conflict. Trump has made similar statements in the past and observers do not currently see Iran in a very weak position.

Investors were also looking forward to Trump's meeting with Chinese leader Xi Jinping on Thursday. Traders are speculating on an extension of the truce in the trade dispute and on talks about global AI regulation. The hope is at least to start a dialogue for a global framework instead of fighting each other, explained Joe Saluzzi, expert at Themis Trading.

The prospect of further rising US interest rates also curbed the buying mood on Wall Street. The head of the Fed's Boston branch, Susan Collins, defended last week's interest rate hike, citing inflation risks. Traders saw a 53 percent chance that the Fed will raise interest rates again in October, by at least 25 basis points, according to the CME FedWatch tool.