Key Points
Over the weekend, a highly-followed X account forecast a possibility of severe recession by 2028, due to AI disruption for white collar workers.
In addition, the Fed's Chris Waller poured cold water on the prospect of more interest rate cuts in the near term.
Ironically, these two negatives are at odds with each other, but financial stocks plunged anyway.
- 10 stocks we like better than American Express ›
Shares of credit card giant American Express (NYSE: AXP) plunged 7.5% on Monday as of 12:55 p.m. EDT.
It's unusual for such a big and seemingly strong company as American Express to fall this much on a day with no company-specific news.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
However, fears over artificial intelligence disruption hit the financial sector hard today, mainly due to a post on X (formerly Twitter) by a highly followed account. In addition, hopes of near-term interest rate cuts were dashed as a result of a Fed official's commentary, which also likely played a hand in today's pullback.
Citrini sinks the markets, with help from Waller
Over the weekend, an X account called "Citrini," a financial research account with over 150,000 followers, posted a piece which detailed a highly negative artificial intelligence economic disruption scenario. In the piece, Citrini lays out a plausible mid-2028 scenario in which the economy plunges into recession, with 10%-plus unemployment, primarily due to AI eliminating the need for white-collar workers. Since consumer spending accounts for 70% of U.S. gross domestic product, recession would likely follow in that scenario, despite "productivity" gains from AI.
As well all know, recessions aren't very good for financial stocks, especially those tied to spending and lending, such as American Express.
In addition to Citrini's doomsday speculation, there were other negatives for financial stocks today, but ironically, in the opposite direction.
Despite fears that AI will take away jobs, last month's jobs report actually beat expectations. Today, Federal Reserve Governor Chris Waller said that if February's jobs report also comes in strongly, it would make the case for holding interest rates steady. Previously, Waller had forecast more cuts to the Federal Funds Rate in light of anemic jobs growth toward the end of last year.
Financial stocks tend to rise when the Fed cuts short-term rates, at least outside of recessions. This is because lower near-term rates lower financial stocks' cost of lending and tends to boost economic growth, which increases lender margins, all else being equal.
Image source: Getty Images.
Panic or buying opportunity?
Before everyone dumps stocks on the Armageddon-like scenario Citrini published this weekend, one should also note the counterarguments some other prominent commentators are making today. After all, it is difficult to envision such negative AI disruption without a robust government or Fed policy response. Furthermore, others have expressed skepticism that AI will be that disruptive so quickly, especially given today's bottlenecks in memory, power, and chip fabrication space.
Nevertheless, investors are "de-risking" today, especially given that stock valuations are generally at historically high levels. While every investor needs to account for their own risk tolerance based on near-term financial needs, panic has generally never been a sound investing strategy.
Nevertheless, the AI story is clearly worth monitoring. Still, investors should follow actual evidence of it happening, not speculation from a single anonymous X account.
Should you buy stock in American Express right now?
Before you buy stock in American Express, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $424,262!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,163,635!*
Now, it’s worth noting Stock Advisor’s total average return is 904% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 23, 2026.
American Express is an advertising partner of Motley Fool Money. Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
