Wall Street slides as AI leaders urge slowdown, chip stocks tumble
Wall Street closed lower after AI CEOs warned of rapid development risks, pulling down Nvidia and other chip makers.
U.S. markets ended the day in the red as top AI company leaders highlighted safety concerns and urged a deceleration of artificial-intelligence progress, triggering a broad sell-off in chip makers. Nvidia fell 3.4%, Micron slipped more than five percent and Broadcom and AMD each dropped over four percent, dragging the PHLX chip index down nearly six percent. The dip came as the benchmark 10-year Treasury yield briefly rose above five percent, a level analysts say could pressure the Federal Reserve to act more aggressively at its upcoming meeting.
Energy markets reacted to fresh strikes on Saudi infrastructure and attacks in the Middle East, pushing Brent crude up about one percent. Meanwhile, software stocks such as ServiceNow, Adobe and Workday rallied, and Bank of America shares slid after its CEO warned of a double-digit drop in investment-banking fees.
Why it matters
AI safety warnings and rising bond yields are unsettling tech stocks and could influence upcoming Fed policy decisions.
How this story developed
- Aug 19 Fed officials warn higher rates may be needed if inflation stays elevated
- Sep 6 In a bid to steady the bond market, the Treasury said it will buy back $6 billion of longer-term securities, including 10-year and 20-year Treasuries. The move followed a recent increase in yields that worried investors and budget analysts. Shortly after the announcement, the benchmark 10-year yield rose to 4.84%, its highest level since 2023, while the 20-year reached 5.3%. Critics, such as Stanley Druckenmiller, argue that suppressing yields masks the true cost of debt.
- Sep 7 Iran claimed to have hit an unmanned U.S. vessel in the Strait of Hormuz, which the U.S. dismissed as false.
- Sep 8 Iran announced it will double the price of fuel consumed beyond its quota.
- Sep 8 Iran’s Fars news agency reported an explosion heard in the southern Jask area off the Gulf of Oman and east of the Strait of Hormuz.
- Sep 9 The buyback size was increased from $4 billion to $6 billion.
- Sep 10 Oil prices have risen above $95 a barrel amid renewed Middle‑East tensions.
- Sep 10 New reporting highlights a sharp inflation jump and rising fuel costs, reinforcing expectations of a deposit‑rate increase.
- Sep 10 The ECB implemented a 0.25‑point rate increase across its three principal rates.
- Sep 11 Asian stock markets fell on Friday, mirroring Wall Street losses, while Brent crude rose above $108 a barrel as geopolitical strains between the United States and Iran intensified.
- Sep 11 Fed minutes revealed a 9‑3 vote to keep rates near 3.6% and a drop in market odds for a September hike to about 67%.
- Sep 11 August US CPI held steady at 3.4% year‑over‑year and core CPI fell to 2.4%.
- Sep 12 Oil prices rose to just below $109 a barrel as Middle‑East tensions escalated.
- Sep 12 Markets priced in a strong chance of another quarter‑point hike in December.
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