Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2024 in New York City.
Angela Weiss | AFP | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Asia markets rise
Mainland China’s CSI 300 index rose 0.2% and Hong Kong’s Hang Seng climbed 0.5% as China kept its one- and five-year loan prime rates on hold. It comes after Beijing on Friday laid out measures to boost the property market.. Elsewhere in the Asia-Pacific region, Japan’s Nikkei 225 was the biggest mover, up 1%, while South Korea’s Kospi added 0.5% ahead of an interest rate decision on Thursday. Australia’s S&P/ASX 200 gained 0.6%.
Iran’s president killed in helicopter crash
Iranian President Ebrahim Raisi died in a helicopter crash along with Foreign Minister Hossein Amirabdollahian, state media reported Monday. “All the passengers of the helicopter carrying the Iranian president and foreign minister were martyred,” semi-official news agency Mehr News reported. Raisi was returning after inaugurating a dam on Iran’s common border with the Azerbaijan Republic, when his helicopter crashed on landing in northern Iran’s Varzaqan region.
Dow settles above 40,000
The Dow Jones Industrial Average closed above the 40,000 mark for the first time in history. The 30-stock index was up for the fifth consecutive week and climbed more than 6% this year. The S&P 500 and Nasdaq eked out gains on Friday and are up more than 11% in 2024. Treasury yields rose and oil prices climbed higher.
Tesla layoffs continue
Tesla is cutting approximately 600 more employees across its manufacturing facilities and engineering offices in California. Elon Musk’s electric vehicle venture is facing increased competition and has already warned employees of plans to cut 10% of its workforce. Musk recently fired his Supercharger team before reportedly rehiring some members, a move reminiscent of the job cuts at Twitter after he acquired the company and later rebranded it as X.
GameStop tanks
GameStop shares dropped nearly 20% after announcing plans to sell additional shares. The company warned it expects a first-quarter net loss of up to $37 million and a significant drop in sales. The brick-and-mortar games retailer, which is grappling with e-commerce-based competitors, was taking advantage of rally in GameStop’s stock fueled by the return of “Roaring Kitty” on social media. Wedbush analyst Michael Pachter said GameStop is not in a position to be profitable.
[PRO] Can Nvidia deliver?
Wall Street has crashed through one milestone after another and it has done it without the help of the so-called Magnificent Seven tech stocks in the last three months. But all that could change this week when Nvidia releases its earnings. CNBC’s Sarah Min tells us what to expect from the AI darling and how high it could go if it gives the right message to investors.
The bottom line
Let’s be honest — we’ve all thought about it. Quitting work and telling your boss he’s a worse manager than Michael Scott or David Brent. More often than not, you’re just happy to be moving on. But while they were just shuffling paper, Jan Leike was confronting what could be an existential threat.
Leike was part of OpenAI’s safety leadership team. In his departing X post, he said the Microsoft-backed startup’s “safety culture and processes have taken a backseat to shiny products,” adding, “We urgently need to figure out how to steer and control AI systems much smarter than us.”
What OpenAI demonstrated at the start of the week was a huge step in human-computer interaction. The AI agent, with uncanny realism, easily translated from Italian to English. Sal Khan, CEO of Khan Academy, used the bot to guide his son through a math problem. Later on CNBC, Khan said he was introducing a teaching bot, Khanmigo, for all U.S. teachers, funded by Microsoft.
A teacher looking at that demonstration would, rightly, be alarmed at the pace of development and deployment. It is an existential threat to their jobs and to possibly all jobs. Goldman Sachs estimated 300 million jobs could be affected by generative AI, the IMF believes 60% of jobs in advanced economies are exposed to machine learning, about half negatively, and ResumeBuilder says AI-related job losses are on the rise.
Khan believes there is a happy balance between teaching and AI developments. While some are concerned students are getting ChatGPT, Gemini, and Claude to write their essays, the teaching profession is coming up with solutions. Rather than pupils writing essays, they can critique essays written by bots. Khanmigo is said to offer an environment for pupils to work on essays with students, and the AI reports progress to the teacher.
The impact will not only be felt in the classroom — every aspect of a company’s workflow needs a reappraisal. ServiceNow CEO Bill McDermott says we are in the midst of a generative AI transformation of the $7 trillion industrial complex. No job will go untouched. According to Goldman Sachs, generative AI could boost global GDP by up to 7% annually over the next decade.
But as Leike wrote, “Building smarter-than-human machines is an inherently dangerous endeavor. OpenAI is shouldering an enormous responsibility on behalf of all of humanity.” He added, “OpenAI must become a safety-first AGI company,” referring to artificial general intelligence.
Sam Altman, OpenAI’s CEO, responded to Leike’s thread on X, “He’s right, we have a lot more to do; we are committed to doing it.”
All this wouldn’t be possible without Nvidia — its powerful graphics chips are what’s needed to provide the computational capacity to drive these AI models — and it reports earnings on Wednesday after the bell. If Wall Street struggles for momentum, this $2.3 trillion behemoth will be closely watched to see how much demand there is for more of its powerful chips and if generative AI is more than just another dotcom bubble.
— CNBC’s Sarah Min, Haden Field, Lisa Kailai Han, Alex Harring, Yun Li, Lora Kolodny, Jordan Novet, Lim Hui Jie and Lee Ying Shan contributed to this report.