A mini market crash on Monday saw the Dow drop 1.7% and stocks like Monday.com and DoorDash fall about 7%. Citrini Research’s Substack post suggested AI disruption could lead to white-collar layoffs and wage deflation, causing market turmoil. While optimistic views on AI creating jobs exist, concerns about structural labor displacement remain.

The post outlined a scenario where AI’s impact on white-collar jobs could lead to a negative feedback loop, termed the “human intelligence displacement spiral.” This could have catastrophic effects on the economy, challenging the notion that AI will create more jobs in the long run. The market reacted strongly to the post, causing significant stock declines.

Despite the initial market turmoil, futures for Tuesday pointed towards a positive opening. The rapid response to the post shows the fragility of investor confidence in the face of AI-induced economic changes. The fear of widespread job displacement and wage deflation caused by AI disruption may have a lasting impact on market sentiment and trading behavior.

Read more at Yahoo Finance: How a doomsday Substack post sparked a market selloff