Anxiety over the threat of artificial intelligence is rising, and a sudden loss of confidence in private credit bets has led to another sharp decline in the stock prices of banks and asset management companies.

The KBW Bank Index fell as much as 4.7% on Friday, dragging the sector to its lowest level since December last year and setting it up for its worst monthly performance since March. This month, banks, payment service providers, and asset management companies have suffered consecutive shocks, most notably issues related to the new generation of artificial intelligence applications and the private credit sector. Block's layoff of nearly half its staff on Thursday night intensified market concerns that artificial intelligence could disrupt a wide range of economic sectors. Credit spreads have also begun to widen, and the collapse of UK mortgage lender MFS, backed by Wall Street, has heightened market worries that banks may face rising default risks in the opaque private lending sector. Analyst Herman Chan said: "Banks are entering a more volatile period, and there are many unknowns regarding the pace of artificial intelligence applications and disruption. The rise in Treasury bonds combined with widening credit spreads indicates the market is in a risk-off mode."