September Nasdaq 100 E-Mini futures (NQU26) are down -1.77% this morning as chipmakers came under heavy selling pressure after leaders of major AI companies called for a slower pace of AI development.
Anthropic CEO Dario Amodei said in an essay on Saturday that it was time to slow the pace of AI development, citing risks posed by today’s most advanced systems. The Anthropic boss called on the industry to pace the development of frontier AI models, proposing measures such as greater coordination among democratic countries and embedded third-party safety evaluators. Amodei’s position was backed in social media posts by OpenAI CEO Sam Altman, xAI chief Elon Musk, and Demis Hassabis, chair of Google’s DeepMind division. Meanwhile, U.S. President Donald Trump downplayed the AI risks, while China rejected them as “fearmongering.”
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Chip and AI infrastructure stocks plunged in pre-market trading as investors worried that efforts to curb cutting-edge AI development could slow the AI investment cycle. Marvell Technology (MRVL) was down over -7%, Intel (INTC) was down about -6%, and Micron Technology (MU) was down more than -5%.
An advance in oil prices further dampened sentiment. The price of WTI crude rose over +2% on Monday after Saudi Arabia closed its East-West pipeline as a precaution following recent attacks, while a planned meeting between Iran and Gulf states on the Strait of Hormuz was postponed.
This week, market participants will focus on the Federal Reserve’s interest rate decision and a fresh batch of U.S. economic data.
In Friday’s trading session, Wall Street’s major equity averages ended in the green as a retreat in oil prices outweighed a report showing accelerating monthly core inflation. Hewlett Packard Enterprise (HPE) jumped over +12% to lead gainers in the S&P 500 and Dell Technologies (DELL) surged more than +11% after Oracle’s capex guidance and Bloomberg’s report that Microsoft plans to triple its computing capacity boosted optimism about continued spending from hyperscalers. Also, chip stocks climbed, with ON Semiconductor (ON) advancing over +8% and Analog Devices (ADI) rising more than +4% to lead gainers in the Nasdaq 100. In addition, most members of the Magnificent Seven advanced, with Amazon.com (AMZN) and Alphabet (GOOGL) gaining more than +1%. On the bearish side, shares of storage and memory makers slid after DeepSeek released its V4.1 Flash model, which requires significantly less High Bandwidth Memory capacity and solid-state drive storage, with Seagate Technology Holdings (STX) falling over -3% to lead losers in the S&P 500 and Nasdaq 100, and Sandisk (SNDK) dropping more than -3%.
The U.S. Bureau of Labor Statistics report released on Friday showed that consumer prices rose +0.4% m/m in August, in line with expectations. On an annual basis, headline inflation held steady at +3.4% in August, right on expectations. At the same time, the core CPI, which excludes volatile food and fuel prices, rose +0.3% m/m and +2.4% y/y in August, compared with expectations of +0.2% m/m and +2.4% y/y. The annual core CPI reading eased slightly from July’s +2.5%, reaching its lowest level since 2021, while the monthly reading unexpectedly accelerated from +0.2% in July. Finally, the University of Michigan’s preliminary U.S. consumer sentiment index fell to 47.8 in September, coming in below expectations of 51.0.
“Taken together, the details of the [CPI] report suggest that underlying inflationary pressures continue to be sticky and the Fed will have to hike in order to help inflation return toward the 2% target,” said Jeff Schulze at Franklin Templeton Institute. “It solidifies the case for several rate hikes in the near-term and will not be a material driver to risk assets.”
The Fed’s interest rate decision will take center stage this week. U.S. rate futures have priced in an 88.7% probability that the central bank will deliver a 25-basis-point rate hike on Wednesday when it concludes its two-day meeting. That would lift the target range for the federal funds rate to 3.75%-4.00% from 3.50%-3.75%, marking the first hike in three years. Fed Chairman Kevin Warsh said last month at the Jackson Hole symposium that the Fed would “have work to do” if it could not “be confident that underlying inflation is moving to our objective, clearly and at sufficient speed.” Friday’s hotter-than-expected monthly core inflation reading did little to provide that reassurance. In addition, the Fed will release updated projections for the economy along with its “dot plot” interest-rate forecasts.
Market participants will also keep an eye on U.S. economic data this week. U.S. retail sales data for August will be the main highlight, providing insight into the strength of consumer spending. The Fed’s August industrial production report will also attract attention. Other noteworthy data releases include the New York Fed-compiled Empire State manufacturing index, the export price index, the import price index, the Philly Fed manufacturing index, initial jobless claims, building permits (preliminary), housing starts, pending home sales, and the Conference Board Leading Economic Index.
In addition, Salesforce (CRM) will host its investor and analyst session this week, while homebuilder Lennar (LEN) is among the notable companies scheduled to report earnings.
Elsewhere, the SEC will hold a roundtable this week with major exchanges, brokers, and market makers to discuss moving toward 24-hour trading in the U.S. equity markets.
The U.S. economic data slate is empty on Monday.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.96%, down -0.28%.
The Euro Stoxx 50 Index is down -1.22% this morning as worries about a slowdown in AI development and rising oil prices weighed on sentiment. Chip-related stocks led the declines on Monday after AI industry leaders called for a coordinated slowdown in AI development. Mining stocks also tumbled, tracking a slump in commodity prices. At the same time, healthcare stocks advanced, with GSK (GSK.LN) climbing over +3% after announcing positive trial results for two lung cancer drugs. Meanwhile, Eurozone government bond yields climbed on Monday, with the 10-year German Bund yield hitting its highest level since June 2009, as rising oil prices fueled inflation concerns. European Central Bank Governing Council member Martins Kazaks told Reuters that the central bank may need to gradually raise interest rates further to contain inflation before the Iran war-driven rise in fuel costs feeds through to wages and other prices. Investor focus this week is on the Bank of England’s monetary policy decision. The BOE is widely expected to keep rates unchanged at 3.75%, though policymakers will likely leave the door open to further tightening as tensions in the Middle East continue to escalate. Investors will also focus on the BOE’s annual announcement on the pace at which it plans to reduce its bond holdings. Beyond monetary policy, attention will center on final Eurozone inflation data for August, Germany’s ZEW economic sentiment index for September, and the ECB’s wage tracker.
The European economic data slate is mainly empty on Monday.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.07%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.81%.
China’s Shanghai Composite Index closed just below the flatline today as losses in AI-linked stocks were tempered by strength in defensive sectors. Semiconductor and other AI-related stocks slumped on Monday, tracking losses in their Asian peers amid calls from major AI executives to slow the pace of frontier AI model development. However, the benchmark index’s losses were limited as investors shifted toward defensive sectors, with bank stocks among the top gainers. Meanwhile, total turnover in Shanghai- and Shenzhen-listed A-shares stood at 1.6 trillion yuan on Monday, falling to its lowest level since April. Elsewhere, fibre-optic communications equipment maker Ligent Technologies is seeking to raise about HK$5.67 billion ($723 million) in Hong Kong through an initial public offering. In corporate news, Z.AI Co. Ltd. plunged over -9% in Hong Kong after raising $5 billion through a stock-and-convertible offering. Investor attention this week is on China’s economic activity indicators for August, which will offer the most comprehensive view of how the economy performed last month. Economists forecast industrial production growth to pick up slightly, supported by strong external demand, while retail sales growth is expected to remain subdued and the slump in fixed-asset investment is expected to deepen.
Japan’s Nikkei 225 Stock Index closed lower today, dragged down by weakness in the technology sector. Tech investor SoftBank Group, one of OpenAI’s largest backers, plunged over -10% after OpenAI CEO Sam Altman said in an interview published over the weekend that the company probably would not go public this year, contributing most to the Nikkei’s losses. Chip-related stocks also slumped after major AI companies called for slower development of frontier AI models due to safety concerns. Memory chipmaker Kioxia Holdings slid over -6% and chip equipment maker Advantest fell more than -2%, further pressuring the benchmark index. In addition, sentiment was dampened by a renewed rise in oil prices amid Middle East tensions. Meanwhile, long-term Japanese government bond yields rose on Monday amid continued expectations for a faster pace of rate hikes from the Bank of Japan. The BOJ is widely expected to raise its benchmark rate by 25 basis points to 1.25% this week, the highest level since 1995, after a series of supportive economic reports. Attention will be on the central bank’s forward guidance. “Governor Ueda is likely to refer at the press conference to both the risk that underlying inflation could overshoot 2% and the cumulative effects of past rate hikes on the economy,” according to Morgan Stanley MUFG Securities. Ahead of the BOJ’s decision, investors will closely watch Japan’s trade data and national core CPI for August. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +4.23% to 31.06.
The Japanese July Industrial Production was revised lower to -0.2% m/m from the preliminary estimate of +0.1% m/m.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks sank in pre-market trading amid concerns over a slowdown in AI development. Marvell Technology (MRVL) was down over -7%, Intel (INTC) was down about -6%, and Micron Technology (MU) was down more than -5%.
Software stocks, which have been pressured by AI disruption concerns, climbed in pre-market trading, with ServiceNow (NOW) rising over +4% and Atlassian Corp. (TEAM) gaining more than +3%.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - September 14th
Kestra Medical Technologies (KMTS), CoinShares (CSHR), Radiant Logistics (RLGT), Dave & Buster’s Entertainment (PLAY), High Tide (HITI), Conexeu Sciences (CNXU), Coda Octopus Group (CODA), RF Industries (RFIL).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.