All three major New York stock indexes fell as U.S. Government Bonds yields and global oil prices rose and calls to slow the pace of artificial intelligence (AI) development spread.
On the 14th (local time) on the New York Stock Exchange, the Dow Jones Industrial Average ended down 152.09 points, or 0.29%, at 52,421.20. The Standard & Poor's (S&P) 500 index fell 37.00 points, or 0.48%, to 7,619.98, and the tech-heavy Nasdaq composite closed down 146.62 points, or 0.56%, at 26,186.41.
Higher global oil prices were cited as a factor pressuring stocks. Saudi Arabia was reported to have temporarily halted for weeks the operation of the East–West pipeline that bypasses the Strait of Hormuz due to a drone attack.
Brent crude for November delivery settled up 1.02% at $105.68 a barrel, and West Texas Intermediate (WTI) for October delivery finished up 1.34% at $101.39 a barrel.
Volatility also sent Government Bonds yields sharply higher. The 10-year U.S. Treasury yield jumped intraday to 5.014%, a record high since Oct. 2023. It later fell to 4.934%, but selling in U.S. Treasurys continued. The 10-year Government Bonds yield's move above the "psychological resistance level" of 5% for the first time in 13 years appears to have weighed on stocks.
In addition, AI stocks fell across the board after Dario Amodei, the chief executive officer (CEO) of Anthropic, and other heads of major AI developers argued that the pace of improving cutting-edge models should be slowed to match the speed of putting safety measures in place. Nvidia (-3.36%), Micron (-5.25%), Broadcom (-4.77%), AMD (-4.40%), Intel (-5.59%), Marvell Technology Group (-7.32%), and SK hynix ADR (-7.6%) declined.
In particular, the U.S. Federal Reserve (Fed) is set to decide the September benchmark interest rate on the 17th in Korea time early morning, which is expected to add pressure. According to CME FedWatch, the market is pricing in about a 92% probability of a rate hike.
Jay Woods, chief market strategist at Freedom Capital Markets, said, "Given the data and market expectations, a rate hike is a clean decision," adding, "The market has already priced it in, and I think it can rebound with a hike. However, if there is no rate change, a negative market reaction could emerge."