Dow Jones and NASDAQ plunge as tech stock rout deepens; IBM shares plunge 13%

The US market started the week on a very weak note as all the key indices fell by over 1% on Monday. S&P500 fell dropped 0.9%, NASDAQ plunged 1.2%, and Dow Jones fell by over 800 points on Monday. A large part of the fall was triggered by heavy selling in the software stocks, as Anthropic’s new AI model could perform more complex tasks, further threatening the existing software business model. Furthermore, the tariff-led angst continued to prompt investors to reduce their bets on the US equities.

President Trump imposed 15% tariffs under Section 122, prompting the EU Parliament to delay approval of the trade deal with the US and questioning the policy's sustainability beyond 150 days. In his X post, President Trump further threatened to impose higher tariffs on countries that are playing games with it.

Anthropic’s new model strikes on IBM

Anthropic AI models have already created havoc in the software stocks by performing complex coding work on their own, threatening to make the business models obsolete. With its latest development, the Claude code could help modernise the Common business oriented language or COBOL. The Claude code could help automate and analyse the most complex COBOL modernisation codes. Following the announcement by Anthropic in its latest blog, shares of IBM, which has COBOL as a key vertical, plunged 13% in a single day.

The Anthropic's blog post said, "COBOL handles an estimated 95% of ATM transactions in the US. Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines, and government. Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernisation".

It further added, "Map dependencies across thousands of lines of code. Document workflows that nobody remembers. Identify risks that would take human analysts months to surface. Provide teams with the deep insights they need to make informed decisions. With AI, teams can modernise their COBOL codebase in quarters instead of years".