Meta's new artificial-intelligence agent already helped push the Nasdaq composite to records. Now it might be claiming some victims in the process.
The rapid adoption of the Facebook parent's Muse app reignited fears that AI will disrupt the financial-services industry, contributing to a selloff Tuesday in shares of wealth-management firms, brokerage houses and even big banks.
The S&P 500 financial sector's 2% retreat weighed down the broader index, while stock in Charles Schwab and LPL Financial each dropped more than 6%. Shares in Raymond James and Ameriprise Financial similarly fell, as did those of JPMorgan, Bank of America and a host of smaller banks nationwide. Travel-site owner Booking Holdings and insurance-provider Allstate were also hit.
The tremors mimicked a similar selloff earlier this year when financial-technology firm Altruist unveiled a tool that aimed to create personalized tax strategies. But analysts say Muse, which has already partnered with the likes of PayPal and fintech firm Plaid, has a broader potential to change many basic aspects of consumer payments, financial planning, insurance coverage and more.
An existing Meta Platforms user base that already numbers in the billions across its various apps doesn't hurt-unless you're part of the old guard.
It isn't that any individual AI agent is upending the sector overnight, said Devin Ryan, head of financial services and fintech research at Citizens. But a series of such product launches in recent months has "allowed a narrative to run that the world is changing and there's more uncertainty as the world changes."
The threat to financial firms extends beyond the potential that robots will cut out some human advisers and their fees. In Ryan's eyes, agents could ultimately help move client money for tax-loss harvesting and other goals more efficiently, leaving less cash sitting around for companies like brokerages to turn into their own profits.
"If an agent is optimizing 24/7," Ryan added, "does that remove latent cash in the system?"
Investors and consultants cautioned that Wall Street's reaction to Muse could ultimately reverse once established players catch up with technological change. "If you run an ocean liner, you can't turn it around by tomorrow," said Alois Pirker, founder of Pirker Partners, which advises wealth managers. "It's a huge opportunity for those firms because, of course, they do have all the data."
Last week, Anthropic rolled out a suite of Claude workflow tools that hook up to platforms run by the likes of Schwab and Vanguard. "To the extent Schwab can service the advisor who then becomes more productive with advice and asset gathering, that would ultimately benefit the firm through custody, engagement, etc.," Macrae Sykes, portfolio manager at Gabelli Funds, wrote in an email.
For now, though, the innovation is dampening Wall Street's enthusiasm for financial firms that are already adapting to a backdrop of higher-for-longer interest rates that could crimp lending. The 10-year Treasury yield Tuesday inched slightly higher to 4.966%.
Financial stocks' declines held the S&P 500 roughly flat. The Dow Jones Industrial Average ticked 0.4% lower, losing 185 points, while a continued climb in chip shares helped the Nasdaq advance 0.5% to a fresh record.
Also on Tuesday, a dayslong selloff in oil momentarily slowed after President Trump again promised that Iran would never have a nuclear weapon. Speaking before the United Nations General Assembly, Trump framed the path forward for the conflict between Washington and Tehran as a choice between a lasting peace deal and the annihilation of the Islamic Republic.
The president later said that he has called for a ban on U.S. diesel exports in a bid to tamp down domestic prices for the likes of farmers and truckers. While Brent crude futures closed 1.1% lower Tuesday, to $99.25 a barrel, U.S. contracts for diesel and gasoline edged higher.
Some analysts say curbing diesel shipments abroad could backfire. "The problem with export bans is that they don't increase domestic supply, but may lower supply, causing a further rise in prices," said Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities.
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