AI Sell-Off Hits Markets; Anthropic IPO Prospects and Bond Income in Focus

Technology stocks led markets lower this week, with the Morningstar US Total Market Index falling 0.4% and the Communication Services index dropping 5.5%, driven by disappointing earnings from major AI-related firms like Alphabet, Amazon, and Intel. Investor concerns focus on whether massive AI infrastructure spending will generate returns, fueling volatility in the sector. Despite this, money managers remain confident Anthropic can stage a successful IPO, potentially as early as next month, according to Morningstar’s Colin Laidley. Separately, neocloud firm CoreWeave saw its bond values plunge amid AI anxiety, though analysts don’t see broader credit market contagion yet. Morningstar also highlights fixed income income opportunities, steady Fed rates with potential 2027 cuts, and utilities’ growth potential from AI data centers.