Equities Slide Amid AI Development Concerns, Surging Oil Prices, and Soaring Bond Yields

The S&P 500 Index ($SPX) (SPY) is down by -0.83% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down by -0.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down by -1.39%. E-mini S&P futures (ESU26) are down -0.80%, and September E-mini Nasdaq futures (NQU26) are down -1.31%.

Stock indexes are under pressure today, with the Nasdaq 100 slipping to a six-week low. Chipmakers and AI-infrastructure stocks are leading the broader market lower following proposals from the leaders of the largest artificial intelligence firms to slow the technology’s development. The proposal has raised concerns that regulatory efforts to curb AI could restrict billions of dollars in capital expenditure dedicated to building out the technology. On the upside, software stocks are advancing today as the prospect of an AI spending slowdown reduces the risk of disruption to software companies.

AI stocks are pulling back after Anthropic CEO Amodei announced plans to introduce additional safeguards, calling on the industry to slow the development of its most advanced AI models. OpenAI’s Sam Altman and xAI’s Elon Musk have endorsed the proposal.

Today’s more than 3% surge in crude oil prices is also stoking inflation expectations and pressuring equities as rising inflation expectations push global interest rates higher. The UK Gilt 10-year bond yield rose to a 19-year high of 5.43%, the 10-year German Bund climbed to a 17-year high of 3.56%, and the 10-year US Treasury yield rose to a 2.75-year high of 5.01%.

October WTI crude oil futures (CLV26) are up more than 3% today on concerns that global oil supplies could tighten further after Saudi Arabia shut down a major pipeline following attacks, disrupting a key route that bypasses the Strait of Hormuz. Saudi Arabia closed the East-West pipeline late last week—a conduit carrying 7 million barrels per day of crude—as a precautionary measure following attacks by Houthi rebels and gave no indication of when it would reopen. Saudi Arabia told OPEC last Thursday that its crude production in August fell to 6.238 million bpd, the lowest level since 1990.

Markets are pricing in a 91% probability of a 25 basis point Fed rate hike at the Tuesday/Wednesday FOMC meeting.

Overseas stock markets are lower today. The Euro Stoxx 50 fell to a six-week low and is down -1.18%. China’s Shanghai Composite closed down -0.07%. Japan’s Nikkei-225 Stock Average dropped to a six-week low and closed down -0.81%.

Interest Rates

December 10-year Treasury notes (ZNZ6) are down by 8 ticks. The 10-year Treasury yield is up +3.5 bp to 5.002%. Treasury notes tumbled to a new 2.75-year nearest futures low today, and the 10-year Treasury yield rose to a 2.75-year high of 5.012%. Today’s more than 3% jump in WTI crude oil has boosted inflation expectations and is undermining Treasury note prices. Additionally, heightened expectations of a 25 basis point rate hike by the Fed at the Tuesday/Wednesday FOMC meeting are weighing on Treasury prices. However, today’s decline in equity markets has prompted some safe-haven demand for government debt, limiting losses in Treasuries.

European government bond yields are moving higher today. The 10-year German bund yield posted a 17-year high of 3.555% and is up +4.2 bp to 3.546%. The 10-year UK gilt yield climbed to a 19-year high of 5.434% and is up +8.6 bp to 5.429%.

ECB Executive Board member Isabel Schnabel said recent energy price developments have been “quite concerning” as officials weigh further interest rate increases.

ECB Governing Council member Peter Kazimir said that inflation risks are “clearly tilted to the upside” and the ECB will raise interest rates further if necessary.

Markets are pricing in a 78% chance of a 25 basis point ECB rate hike at the ECB’s next meeting on October 29.

US Stock Movers

Chipmakers and AI stocks are retreating today, weighing on the broader market. The iShares Semiconductor ETF (SOXX) is down more than -5% at a one-week low. Coherent (COHR) is down more than -11%, and Teradyne (TER) is down more than -11%, leading losers in the Nasdaq 100. Also, Arm Holdings (ARM) is down more than -8%, and Marvell Technology (MRVL) is down more than -7%. In addition, Applied Materials (AMAT), Advanced Micro Devices (AMD), Lam Research (LRCX), Intel (INTC), and Micron Technology (MU) are down more than -6%, and ASML Holding NV (ASML), KLA Corp (KLAC), SanDisk (SNDK), and Western Digital (WDC) are down more than -5%. Finally, Analog Devices (ADI), Broadcom (AVGO), NXP Semiconductors NV (NXPI), Seagate Technology Holdings Plc (STX), and Microchip Technology (MCHP) are down more than -4%.

Software stocks are gaining today after AI leaders called for a slower pace of development. Thomson Reuters (TRI) is up more than +6%, and Autodesk (ADSK) and ServiceNow (NOW) are up more than +5%. Also, Intuit (INTU) and Workday (WDAY) are up more than +4%, and Salesforce (CRM) is up more than +3% to lead gainers in the Dow Jones Industrials. In addition, Adobe Systems (ADBE) is up more than +3%, and Atlassian Corp (TEAM) and Datadog (DDOG) are up more than +2%.

Cybersecurity stocks are moving higher today. CrowdStrike Holdings (CRWD) is up more than +12% to lead gainers in the S&P 500 and Nasdaq 100, and Zscaler (ZS) is up more than +11%. Also, SentinelOne (S) and Palo Alto Networks (PANW) are up more than +10%, and Okta (OKTA) is up more than +9%. In addition, Cloudflare (NET) and Fortinet (FTNT) are up more than +5%.

Corning (GLW) is down more than -12% to lead losers in the S&P 500 after entering into a $2 billion equity distribution agreement with Goldman Sachs.

Hewlett Packard Enterprise (HPE) is down more than -10% after Evercore ISI downgraded the stock to inline from outperform, citing valuation.

Definium Therapeutics (DFTX) is up more than +4% after announcing that a late-stage trial of its investigational pill for generalized anxiety disorder met its primary and key secondary efficacy endpoints.

Earnings Reports (9/14/2026)

Liberty Live Holdings (LLYVK).

Source link