A Statement From Tiny Company Algorhythm Triggers ‘Black Thursday’ for Global Assets

TradingKey - On February 12, according to Bloomberg, micro-cap company Algorhythm (RIME) issued a statement claiming that its AI logistics platform can help customers increase freight volume by 300% to 400% without increasing operational staff.

Rather than boosting market confidence, this news triggered a sharp sell-off in U.S. stocks, with trillions of dollars in market capitalization evaporating from the broader market during intraday trading.

The U.S. logistics sector slumped on Thursday, with the Russell 3000 Trucking Index falling 6.6%, CH Robinson (CHRW) plummeted 15%, the Nasdaq fell more than 2%, Gold (XAUUSD) and Silver (XAGUSD) were also sold off. Market investors remain highly vigilant and even fearful of any signs that AI might disrupt traditional industries.

Multiple industries, including software makers, real estate firms, private credit providers, insurance brokers, and wealth management companies, have been hit hard by fears of AI disruption. Panic is continuing to spread and is seeking the next potentially affected sector.

The market is shifting from a frenzied pursuit of AI technology to a fear of its disruptive power. There are deep-seated concerns that artificial intelligence will upend the business models of many industries.

Meanwhile, the U.S. reported its largest drop in existing home sales in four years, sparking questions about the weakness of the U.S. economy and heightening risk-aversion.

Mark Hackett, chief market strategist at Nationwide, believes that while the long-term impact of AI is inevitable, such a panic-driven sell-off is actually exaggerated.