There’s another AI-doom post doing the rounds. This time, the S&P 500 dives nearly 40%.

MarketWatch

by Jamie Chisholm

February 23, 2026

AI-Generated Deep Dive Summary

A recent commentary from Citrini Research and Alap Shah of Lotus Technology Management warns that while artificial intelligence (AI) is booming, it could have severe negative consequences for the broader economy. The piece, written as a retrospective view from June 2028, paints a concerning picture: the unemployment rate has risen to 10.2%, and the S&P 500 has dropped nearly 40% from its October 2026 highs of around 8,000. This scenario highlights how AI's widespread adoption could lead to significant job losses in sectors like manufacturing, retail, and services, ultimately harming stock markets. The article speculates that AI's efficiency and cost-cutting capabilities may eliminate millions of jobs, particularly in industries where automation is most feasible. This shift could disrupt not only the labor market but also consumer spending, which is a critical driver of economic growth. As companies invest heavily in AI technologies to stay competitive, the broader economy may struggle with reduced demand and higher unemployment rates. This warning serves as a cautionary tale for investors and financial markets. While AI-driven innovation can boost productivity and drive short-term gains for tech-focused stocks, it also carries long-term risks. The potential downsides of AI include not just economic instability but also ethical concerns, such as job displacement and the concentration of wealth in fewer hands. Investors need to weigh these risks carefully when assessing the future of the stock market and the broader economy. The commentary underscores the importance of considering both the benefits and drawbacks of AI-driven economic growth. While it may revolutionize industries and create new opportunities, it could also lead to significant disruptions that affect job markets and overall economic stability. For finance professionals and investors, understanding these potential risks is crucial for making informed decisions in an increasingly AI-driven economy.

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Originally published on MarketWatch on 2/23/2026