[New York Stock Exchange] US Treasury Yields, Oil Prices, and AI Development Slowdown Drive Market-Wide Decline

AI Stocks Plunge on Calls to Slow AI Development
U.S. 10-Year Yield Hits 5% Intraday; WTI Surges Past $101
92% Chance of Rate Hike Priced In Ahead of FOMC

On the 14th (local time), all three major indices on the New York Stock Exchange closed lower. Shares related to artificial intelligence (AI) weakened after key AI company executives called for a slowdown in development. In addition, the yield on the 10-year U.S. Treasury note broke through the psychological threshold of 5% during the session, and rising international oil prices further fueled concerns that the Federal Reserve (Fed) may continue monetary tightening, adding to market pressure.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended at 52,421.20, down 152.09 points (0.29%) from the previous trading day. The S&P 500, which focuses on large-cap stocks, dropped 37.00 points (0.48%) to close at 7,619.98, and the technology-heavy Nasdaq Composite lost 146.62 points (0.56%), finishing at 26,186.41.

View of the New York Stock Exchange. New York, USA – Photo by Yoonju Hwang

The market was weighed down by a surge in the U.S. 10-year Treasury yield, discussions within the AI industry about slowing development, and rising international oil prices, all of which put downward pressure on stocks.

On September 12, Dario Amodei, CEO of Anthropic, argued in a public post that AI companies should slow the pace of improving leading-edge models due to safety risks.

In an interview with CBS the following day, CEO Amodei pointed out that the "most challenging dilemma" in regulating the speed of AI development is that even if U.S. companies slow down, China may not follow suit. As other key technology executives also acknowledged the need to strengthen AI safety, concerns grew that the trend of increasing AI investment could lose some momentum.

As a result, Nvidia, the leading AI semiconductor stock, fell 3.36%. Broadcom plunged 4.77%, AMD dropped 4.40%, Intel declined 5.59%, Marvell Technology tumbled 7.32%, and the Philadelphia Semiconductor Index slumped 5.86%.

David Wagner, head of equities at Aptus Capital Advisors, commented, "High-profile figures calling for a slowdown in the development of cutting-edge AI models could send a shock to the market," adding, "While a reduction in capital expenditure would slow corporate profits, it could also improve free cash flow."

He further predicted that, with political rhetoric around the midterm elections ramping up and the market entering a seasonally weak period, stock prices may continue to consolidate for a while.

Uncertainty surrounding a possible public listing (IPO) of OpenAI also dampened investor sentiment toward AI stocks. In an interview on September 12, OpenAI CEO Sam Altman said pushing for an IPO this year would be "an unwise decision."

Rising international oil prices and Treasury yields also weighed on the market. Oil supply concerns mounted after Saudi Arabia halted operations at a key pipeline bypassing the Strait of Hormuz.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for October delivery settled at $101.39 per barrel, up 1.34% from the previous session. Brent crude for November delivery, traded on the ICE Futures Exchange, closed at $105.68 per barrel, gaining 1.02%. During intraday trading, Brent crude briefly approached $110 per barrel.

Yields on U.S. Treasury bonds also surged. The yield on the 10-year note, considered a global benchmark, exceeded 5% during the session, hitting its highest level since October 2023, before retreating to 4.987%. Rising bond yields increase corporate funding costs and diminish the relative attractiveness of equities.

The market is closely watching the Federal Open Market Committee (FOMC) meeting scheduled for September 15-16. According to the CME FedWatch Tool, interest rate futures priced in about a 92% probability that the Fed would raise the benchmark rate at this meeting.

Among individual stocks, Bank of America (BoA) dropped more than 5%. The decline followed remarks by BoA CEO Brian Moynihan, who projected that third-quarter investment banking fee income would fall more than 10% year-on-year, while trading revenue would remain roughly flat compared to last year.

This content was produced with the assistance of AI translation services.