Imagine a fictional memo about an AI-driven economic collapse landing on trading desks across Wall Street and actually moving markets…
That’s exactly what happened on Monday. A speculative Substack post by New York-based Citrini Research triggered a sharp US tech sell-off, with the Dow falling 821.9 points (1.7%), the S&P 500 dropping 1%, and the Nasdaq slipping 1.1%. The note wasn’t a forecast. It was labelled a “thought exercise.” Yet investors didn’t hang around to debate the semantics.
What Was the Citrini Research Note?
The post, titled The 2028 Global Intelligence Crisis, was written as a fictional market dispatch from June 2028. Citrini was explicit: this was a “scenario, not a prediction.”
But fiction or not, the note painted a grim picture. It described rapid AI adoption triggering mass white-collar job losses, weakening consumer spending, and ultimately dragging the S&P 500 down 38% from its October 2026 peak. US unemployment in the scenario? 10.2% — more than double the 4.3% recorded last month.
The report circulated widely over the weekend across social media and trading desks, landing at a moment when markets were already jittery about AI disruption and US trade policy.
Which Stocks Took the Hardest Hit?
The note targeted businesses that rely on transaction fees or act as middlemen — the kind of companies that could find their pricing power gutted if AI agents start cutting out third-party intermediaries.
Payments giants Visa and Mastercard both dropped sharply. Delivery and ride-hailing platforms also fell. Private equity and private credit firms with exposure to software-backed loans were pulled lower too, as Reuters confirmed Monday’s sell-off swept up the private capital sector.
The report also flagged enterprise software as a pressure point — specifically, the idea that AI coding tools could allow companies to replicate software features in-house, squeezing vendor margins.
Anthropic’s COBOL Tool Poured Fuel on the Fire
The Citrini note wasn’t the only catalyst. Also on Monday, Anthropic — whose Claude AI tools have sparked a string of software sell-offs in recent weeks — announced a new product designed to assist with COBOL, the legacy programming language that underpins much of global banking infrastructure, including the majority of American ATM transactions.
The market reaction was swift. IBM fell 13.2% — its steepest single-day drop since 2000. Consulting and IT services firms with exposure to legacy systems modernisation work also declined.
UBS analysts summed up the mood bluntly, noting that coding has become “the first domain where AI demonstrably outperforms humans at scale.”
Broader Market Context: Not Just About AI
Monday’s moves didn’t happen in a vacuum. On the trade front, Donald Trump moved to replace recently invalidated tariff measures with new global levies under a separate legal authority, keeping markets on edge. Valuations were already stretched, with the S&P 500’s cyclically adjusted price-to-earnings (CAPE) ratio recently topping 40 — a level reached only rarely in modern market history. And in the UK, the House of Commons Treasury Committee had recently warned that financial regulators risk falling behind the pace of AI deployment in financial services, calling for clearer accountability frameworks.
The Bigger Takeaway
A fictional scenario moved real money. That tells you everything about how sensitive markets have become to AI disruption narratives right now — particularly in sectors where business models depend on being the middleman.
Citrini’s authors framed their report as a “thought exercise.” But when a hypothetical memo about 2028 moves Mastercard’s stock today, thought exercises start looking a lot like early warning systems. Whether you’re an investor, a professional in a fee-based industry, or just someone with a pension, AI’s economic ripple effects are worth watching closely.
Want to stay ahead of the AI-driven market shifts? Keep an eye on earnings commentary from payments firms and legacy IT providers — that’s where the real signals are hiding.
FAQ
Q1: What is the Citrini Research note that rattled markets?
A: It’s a speculative Substack post titled The 2028 Global Intelligence Crisis, written as a fictional market dispatch exploring an AI-driven economic downturn. The authors labelled it a “scenario, not a prediction,” but it circulated widely across trading desks and triggered a sharp sell-off in US tech stocks.
Q2: Why did IBM stock fall 13.2% on Monday?
A: Anthropic announced a new Claude tool to assist with COBOL — the legacy programming language central to banking infrastructure, including most US ATM transactions. IBM, a major provider of COBOL-related mainframe services, was seen as directly exposed to AI disruption of that work.
Q3: Which sectors are most at risk from AI disruption according to the report?
A: Businesses that rely on transaction fees, intermediary roles, or third-party services face the most pressure. Payments firms, ride-hailing platforms, and enterprise software vendors were all flagged as vulnerable if AI agents reduce the need for human or third-party involvement.
Q4: Is the S&P 500 currently overvalued?
A: The S&P 500’s cyclically adjusted price-to-earnings (CAPE) ratio recently exceeded 40 — a level reached only rarely in modern history. That doesn’t guarantee a crash, but it does mean there’s less room for error if corporate earnings disappoint.
Q5: What are UK regulators saying about AI in finance?
A: The House of Commons Treasury Committee recently warned that financial regulators risk falling behind the pace of AI deployment in financial services. It called for clearer accountability frameworks to keep oversight in step with rapid technological change.
DISCLAIMER
Effective Date: 15th July 2025
The information provided on this website is for informational and educational purposes only and reflects the personal opinions of the author(s). It is not intended as financial, investment, tax, or legal advice.
We are not certified financial advisers. None of the content on this website constitutes a recommendation to buy, sell, or hold any financial product, asset, or service. You should not rely on any information provided here to make financial decisions.
We strongly recommend that you:
- Conduct your own research and due diligence
- Consult with a qualified financial adviser or professional before making any investment or financial decisions
While we strive to ensure that all information is accurate and up to date, we make no guarantees about the completeness, reliability, or suitability of any content on this site.
By using this website, you acknowledge and agree that we are not responsible for any financial loss, damage, or decisions made based on the content presented.
