Citrini Founder Shocked His AI Prediction Spurred Stocks Selloff

A sharp selloff in US stock markets on February 24, 2026, was driven by losses in electric vehicle and China concept stocks. Rivian dropped more than 14%, Tesla fell nearly 6%, and Zeekr plunged over 23%. The broader market saw the S&P 500 close down 0.60%, the Dow Jones lose 0.47%, and the Nasdaq fall 0.64% according to market data.

The selloff was exacerbated by comments from Federal Reserve Chair Jerome Powell, who indicated the central bank does not need to rush to cut interest rates. This led traders to slash expectations for a rate cut in December 2026, with the probability now at less than 61%. Powell's remarks caused U.S. Treasury yields to rise, with the two-year rate hitting a four-month high.

AI-related stocks also experienced a mixed performance. While SoundHound AI rose 5.74%, most AI companies saw declines. Super Micro Computer dropped 11.41%, and C3.ai was projected to report a quarterly EPS of -$0.29 on revenue of $75.64 million.

The selloff affected a wide range of sectors, with most S&P 500 industries declining. The industrial, consumer discretionary, and healthcare sectors all dropped more than 1.5%. The only positive performers were energy and technology, with the energy sector up 0.14% and the technology sector gaining 0.05%.

Why Did This Happen?

The selloff was triggered by a combination of economic data and policy expectations. The U.S. October PPI rose 2.4% year-on-year, exceeding forecasts. Inflation concerns led to a stronger dollar and reduced optimism for rate cuts. Powell's comments added to the uncertainty, as traders reassessed their expectations for monetary policy. This led to a flight to safety, with the dollar index rising above 107 for the first time in over a year.

The dollar's strength also pressured non-U.S. markets. The euro fell to a one-year low, while the yen hit below 156 against the dollar. European stocks closed higher, but the gap between European and U.S. market performance widened. The S&P 500 has gained about 25% in 2026, while the European Stoxx 600 has risen only 5%.

How Did Markets Respond?

The selloff was felt across multiple asset classes. Bitcoin fell below $88,520, and gold dropped to a two-month low. Oil prices rose slightly, with WTI crude closing at $68.70 per barrel. The strong dollar and inflation expectations pushed up U.S. Treasury yields, particularly in the short-end of the curve.

Technology stocks were not uniformly affected. While the Nasdaq closed down 0.64%, the Philadelphia Semiconductor Index initially rose 1.4%. Nvidia closed up 0.33%, while Intel rose 0.44%. However, AI stocks generally underperformed, with companies like Meta and Palantir declining by 0.49% and 2.5%, respectively.

What Are Analysts Watching Next?

Analysts are closely watching the upcoming earnings reports and economic data. C3.ai is scheduled to report Q3 earnings on February 25, 2026, with expectations of a $-0.29 per share loss. The company faces ongoing challenges, including a failed business model shift and strategic uncertainty. A recent Seeking Alpha analysis highlighted structural issues in the company's revenue streams and persistent losses.

The market is also monitoring the Federal Reserve's next moves. While Powell has indicated a more cautious approach to rate cuts, traders are still trying to gauge the timing and magnitude. The European Central Bank, on the other hand, is expected to cut rates by 146 basis points by the end of 2025, according to market expectations.

Investors are also watching for further clarity on Trump's proposed policies, particularly the potential cancellation of the $7,500 electric vehicle tax credit. This has already led to significant declines in EV stocks like Nikola and Rivian.

In summary, the selloff highlights the ongoing uncertainty in the market environment. As investors digest economic data and policy signals, the performance of key sectors like AI and EVs will remain closely watched indicators of broader market sentiment.