The financial sector experienced a significant sell-off, with the XLF ETF down over 2%, driven by dual fears of technological disruption and macroeconomic pressures. The rising popularity of Meta's AI agent, Muse, has sparked investor concern that artificial intelligence could erode the profitability of banks, insurers, and brokers by helping consumers easily find better deals and switch providers. Compounding these fears is a challenging interest rate environment, where a flattening yield curve is threatening to squeeze bank net interest margins, a key source of their earnings.