US stocks fall! AI and bond yields weigh on the market. Oil surges past $100. Watch for a Fed interest rate hike.
U.S. stock markets closed lower on Monday (September 14, 2569) weighed down by selling pressure on artificial intelligence (AI) stocks and rising U.S. bond yields. Oil prices also surged above $100 per barrel amid supply concerns. Investors are also watching closely for this week's Federal Reserve (Fed) monetary policy meeting.
US stock markets fell, AI stocks were sold off, and bond yields surged to 5%.
U.S. stock markets closed lower on Monday, driven by a sell-off in AI-related stocks and a temporary surge in the 10-year Treasury yield to 5%, its highest level since October 2566, prompting investors to reduce their holdings of risky assets.
- Dow Jones Industrial Average Closed at 52,421.20 points, down 152.09 points (-0.29%)
- S&P 500 Index Closed at 7,619.98 points, down 37.00 points (-0.48%)
- Nasdaq Composite Index Closed at 26,186.413 points, down 146.622 points (-0.56%)
AI stocks fell after Dario Amodei, CEO of Anthropic, called for a slowdown in AI development due to security concerns, while Sam Altman, CEO of OpenAI, stated that taking the company public this year would be inappropriate.
Nvidia's stock fell 3%, while Broadcom and Advanced Micro Devices dropped more than 4%. Intel's stock declined by more than 5%, and Marvell Technology's by over 7%.
In addition, investors were concerned about the surge in U.S. government bond yields, with the 10-year yield reaching 5% before falling to around 4.987% towards the end of the trading day.
The market is also watching the Fed meeting on Wednesday, with Fed funds futures reflecting approximately a 92% chance that the Fed will raise interest rates by 0.25 basis points from the current target range of 3.5%-3.75%.
European stock markets fell as investors worried about inflation and interest rates.
European stock markets closed lower on Monday , pressured by rising oil prices, rising bond yields, and concerns that central banks may need to tighten monetary policy to control inflation.
- STOXX 600 Index Closed at 635.99 points, down 3.11 points (-0.49%)
- DAX German stock market index Closed at 25,440.81 points, down 127.75 points (-0.50%)
- CAC 40 Index of the French stock market Closed at 8,117.78 points, down 61.99 points (-0.76%)
The investment climate remains pressured by concerns about rising energy prices, following conflicts in the Middle East impacting oil transportation routes and supply. Investors are also assessing the direction of interest rates set by various central banks.
The UK stock market went against the trend, closing higher driven by buying interest in stocks.
The London stock market closed higher on Monday, defying the trends in the US and most European markets, as investors continued to monitor oil prices, interest rates, and the global economic situation.
- FTSE 100 Index UK Stock Market Closed at 10,697.57 points, up 47.13 points (+0.44%)
Despite overall market pressure from inflation and energy price concerns, the FTSE 100 index rose amid assessments of the Bank of England's monetary policy outlook, with the market expecting interest rates to remain unchanged at this week's meeting.
Oil prices surge! Saudi Arabia shuts down a key pipeline, pushing Brent crude above $105.
Crude oil prices rose on Monday after Saudi Arabia shut down the East-West pipeline, a key route for transporting oil bypassing the Strait of Hormuz, sparking concerns about tighter global oil supply.
- WTI crude oil price (October delivery) It closed at $101.39 per barrel, up 1.34%.
- Brent crude oil price (November delivery) It closed at $105.68 per barrel, up 1.02%.
Brent crude prices edged close to $110 per barrel during the day, while WTI climbed near $105 before falling back from its peak. Oil prices had risen about 9% last week following the escalation of tensions between the US and Iran.
Saudi Arabia's East-West pipeline, capable of transporting up to 7 million barrels of oil per day, was damaged by a drone launched from Iraq on Thursday, forcing the Saudi government to shut down the pipeline. The timeframe for repairs has not yet been disclosed.
Analysts say that if the pipeline shutdown lasts longer than the 5-7 days that Saudi Arabia has in reserve, it could cause oil prices to rise more sharply.
Furthermore, a meeting between Iran and Gulf Arab countries to discuss the situation in the Strait of Hormuz, originally scheduled to be held in Oman, has been postponed. Security risks in the Strait of Hormuz remain high following another attack on an oil tanker.
Gold prices fell more than 1% to their lowest level in over a month.
Global gold prices fell on Monday, hitting their lowest level in over a month, after surging oil prices and stronger-than-expected U.S. inflation data fueled market expectations of a Fed interest rate hike at this week's meeting.
- Spot Gold Price It fell 1.8% to $4,271.59 per ounce, the lowest level since August 7.
- Gold price on Comex market (December delivery) It fell 2.2% to $4,311.20 per ounce.
Pressure on gold has increased due to rising oil prices, which have raised market concerns that inflation may accelerate and force central banks to tighten monetary policies. Meanwhile, higher interest rates make gold, an asset that does not yield interest payments, less attractive.
The market is forecasting an approximately 89% chance that the Fed will raise interest rates at this meeting, following data showing the U.S. consumer price index (CPI) rose 0.4% last month from 0.1% in July.
The dollar strengthened on safe-haven buying and expectations of a Fed interest rate hike.
The U.S. dollar strengthened against major currencies on Monday, as conflicts in the Middle East pushed up oil prices and prompted investors to seek the dollar as a safe-haven asset, while markets increased bets that the Fed would raise interest rates this week.
- US Dollar Index The benchmark, which measures the dollar against six major currencies, rose nearly 0.3% after touching 99.42 points, its highest level since September 2.
- Euro/Dollar The exchange rate fell 0.4% to around $1.153, while the pound/dollar dropped 0.1% to $1.3509.
- Dollar/Yen The yen rose 0.5% to 154.37 yen, after weakening from below 153 yen per dollar the previous week.
Financial markets are watching Wednesday's Federal Reserve meeting closely, with a 90% probability that the Fed will raise interest rates following soaring energy prices and stronger-than-expected U.S. inflation data. The Bank of Japan (BOJ) is also expected to raise interest rates on Friday.
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