The AI scare trade accelerates

State of play: The tech-concentrated Nasdaq 100 tumbled 2% Thursday. S&P futures were down slightly in early morning trading Friday.

• "We did see mounting 'AI fatigue,' " but we didn't anticipate that AI would already be harming us humans in the stock market," Ed Yardeni, president of Yardeni Research, said in a note yesterday afternoon.

Zoom in: Stock prices are falling prey to the AI scare trade across industries, from trucking to real estate to software firms.

The big picture: Artificial intelligence is starting to look like the kind of big technology that will reshape the way businesses work, as the internet did at the turn of the century.

• No one quite knows what that disruption will look like. At first, that was exciting, driving up Big Tech stocks — now it's unnerving.
• It's not even clear that the hyperscalers shelling out billions of dollars on AI are going to make money from it.

Catch up quick: Software stocks got hit first, as momentum seemed to build on the idea that AI would bring development in-house.

The intrigue: Now, it seems like any nibble of AI change in any industry can trigger a reaction. And it's getting a bit weird.

• Yesterday, the Wall Street Journal reported that a press release from a company called Algorhythm Holdings — that until this summer was in the karaoke machine business — started a sell-off in trucking stocks.
• In the release, the company said it boosted freight volume without an increase in headcount.

Reality check: The declines are relatively small percentages — stocks are still trading near all-time highs. And no one really knows exactly why the market moves.

The bottom line: AI was supposed to take jobs and give the stock market a huge boost.

• Alas, there are signs this pact is faltering.