A Fed Decision Looms As An AI Warning Rattles Tech Stocks

The Federal Reserve begins a two-day meeting tomorrow, and markets spent Monday positioning for a decision that could bring the first rate increase in more than a year. A weekend essay from Anthropic's chief executive warning that AI companies are moving too fast sent chip stocks tumbling from Tokyo to New York. Oil jumped about 3% after an attack shut Saudi Arabia's main pipeline alternative to the Strait of Hormuz.

Fast Facts

• Larry Ellison canceled a previously disclosed plan to sell 50 million Oracle shares worth about $7.5 billion (Read More)
• Adobe closed its latest quarter with $27.50 billion in annual recurring revenue, the subscription sales it can count on over a year (Read More)
• Treasury Secretary Scott Bessent argued the U.S. can grow its way out of its debt problem through faster economic expansion (Read More)
• President Trump's proposed $5,000 checks to adult citizens would need congressional approval and could cost upward of $1.3 trillion, House Speaker Mike Johnson said (Read More)
• Next year's Social Security cost-of-living raise could add about $71 a month to benefits, which MarketWatch notes is itself a sign that inflation is not fading (Read More)
• A 10% U.S. tariff on Irish whiskey is set to be rescinded, President Trump pledged during his weekend visit to Ireland (Read More)

Global News

• Samsung Electronics and SK Hynix rejected Korean utility KEPCO's proposal for a 25 trillion won, about $18.7 billion, upfront payment to fund power infrastructure for planned chip clusters (Read More)
• Shares of Euronext and Deutsche Boerse rose about 2% after Euronext's chief executive said a potential combination of Europe's two largest exchange groups "could make strategic sense" (Read More)
• King Charles is set to host AI executives as concern grows in the U.K. about the technology's risks (Read More)
• Hong Kong's stock exchange faces fresh pressure to speed up a review of longer trading hours after South Korea extended its own session by four hours (Read More)

The Fed Meets Tomorrow, And The Bet Has Moved To A Hike

The Federal Reserve's rate-setting committee opens a two-day meeting Tuesday, September 15, with the decision and Chair Kevin Warsh's press conference expected at 2:30 p.m. Eastern on Wednesday. The Fed's target range for short-term rates has sat at 3.50% to 3.75% since a cut last December, untouched through all of 2026, most recently held on a 9-3 vote in July with three officials dissenting in favor of a hike. As we covered last week, a hot core-inflation reading on Friday, September 11 pushed the odds of a quarter-point move (0.25 percentage point) sharply higher. By Monday, a market where traders bet on where the Fed will set rates put the chance of a hike near 86%, up from roughly 70% before Friday's number, and Goldman Sachs reversed an earlier call for a pause to expect a hike.

What is new this week is how far that bet has traveled. Treasury yields closed Friday, September 11 at multiyear highs: the 2-year at 4.63%, the 10-year at 4.96% and the 30-year at 5.35%. Then it moved across markets. On Monday the British pound fell to an 11-day low against the dollar, with markets bracing for both the Fed and a Bank of England decision the next day; gold traded about 1.1% lower in early European hours; and Germany's 10-year government bond yield hit a fresh 15-year high, even as U.S. Treasury yields eased slightly from Friday's peaks. A decision the Fed has not made yet is already showing up in currencies and metals.

Why does one committee's expected quarter-point ripple this far? The Fed sets the benchmark rate other borrowing costs are built on, so a higher setting feeds into mortgage rates, what companies pay to borrow, and how appealing it is to hold cash instead of stocks. When traders expect that benchmark to rise, they also demand more to lend for longer, which lifts longer-term yields, dents the appeal of gold, which pays nothing to hold, and pulls money toward the currency offering the better return. That is why gold, sterling and German bunds are all moving now, before a single official has voted.

An 86% probability is a bet, not a decision, and no one has voted this week. If the Fed does raise rates, the way that vote breaks will say as much as the move itself, since the number of dissents and the direction they lean is the clearest signal of where policy goes after Wednesday.

Sources: Economic Times on hike odds · Economic Times on Goldman Sachs · WSJ on Treasury yields and the German Bund · WSJ on sterling · WSJ on gold · U.S. Treasury · Rapunzl on hike odds at 70% · Rapunzl on last week's hot CPI

An AI Slowdown Warning From The Labs Themselves Rattled Global Markets

Anthropic chief executive Dario Amodei published a weekend essay arguing that AI companies should slow the pace at which they make their models more capable in order to address safety risks, a piece one report described as a warning against a race to the bottom. Over the weekend OpenAI chief executive Sam Altman and other leaders of frontier labs, the handful of companies building the most advanced AI systems, echoed the call. Investors did not take it well. By roughly 4:46 a.m. ET Monday, U.S. stock-index futures, contracts that track where an index is heading before the regular market opens, were lower across the board: the Nasdaq 100 E-minis, the version of that contract most traders watch, fell 1.72%, or about 505 points; the S&P 500 E-minis slipped 0.70%; and the Dow E-minis lost a smaller 0.18%. This one was different: it came from the companies' own chief executives, not outside researchers, and moved global markets the same day.

Here is why a couple of essays could push prices around the globe. AI infrastructure spending, meaning the chips, the cloud computing capacity, and the financing behind both, has been one of the main engines of the 2026 stock rally, and much of SoftBank's recent value rests on its being an early, large investor in OpenAI. When the leaders of the two biggest AI labs publicly question whether their own industry is moving too fast, markets read it as a warning about how durable that spending cycle is. That is why chipmakers and the companies financing AI fell hardest, rather than the drop being any single company's problem.

The selloff hit hardest in Asia. SoftBank Group tumbled as much as 13.2% in Tokyo trading, and chip stocks across the region fell alongside it, with South Korea's Kospi index off more than 3% intraday. The slide in SoftBank shares alone was estimated to have cut the personal fortune of founder Masayoshi Son by about $8 billion in a single session. One market report described investors' reaction as negative but orderly, which fits what the numbers show: a sharp, uneven move driven by a shift in tone from the people running the industry rather than by any earnings miss or product failure.

Sources: WSJ · MarketWatch · Investing.com · Bloomberg · Forbes

Saudi Arabia's Backup Oil Route Went Dark, And Crude Jumped Again

Oil is the story we have tracked for two weeks, and Monday added a sharp new turn. Saudi Arabia's East-West pipeline, its main alternative to shipping crude through the contested Strait of Hormuz, was shut after a drone attack in the Riyadh and Medina regions, while Iran-aligned Houthi forces tightened their grip on Yemen's Red Sea coastline and the Bab el-Mandeb Strait at the sea's southern end. That pipeline carries roughly 4 to 5 million barrels a day, about 4% to 5% of the world's oil supply, so traders treated its loss as real. WTI, the main U.S. crude benchmark, rose Monday to $102.84 a barrel, up 3.9%; Brent, the global benchmark, gained about 2.8% to $107.37 and briefly touched $108.41, up 3.5%, intraday. Two other pieces landed the same day: Oman postponed a planned Iran-Gulf meeting on managing Hormuz shipping, and a vessel in the strait was hit by a projectile and caught fire. ANZ analysts warned that "Riyadh has now lost the option to use western exports if the Strait of Hormuz deteriorates again."

The pipeline mattered because it was Saudi Arabia's insurance policy against exactly this kind of disruption, a way to send crude out through the Red Sea instead of squeezing it all through the narrow, heavily watched Hormuz passage. With that backup route now closed too, and with Houthi forces controlling more of the Bab el-Mandeb chokepoint the Red Sea path depends on, a large share of the kingdom's seaborne export capacity is suddenly exposed to the same conflict at once. Economic Times reports that some analysts see oil climbing toward $120 a barrel if the threats persist, while others see a retreat toward $80 if exports stabilize, a wide gap that measures how much no one knows yet. And the reason this reaches past energy markets is simple: oil is a direct input into the inflation figures the Federal Reserve watches, so a jump like Monday's does not just raise the price at the pump, it strengthens the argument for keeping interest rates higher to fight inflation.

Sources: WSJ · Investing.com · Economic Times · Rapunzl on last week's oil move

What To Watch

The week belongs to the Federal Reserve. Policymakers are expected to meet Tuesday and Wednesday, Sept. 15 and 16, with a decision and a press conference from Chair Kevin Warsh expected at 2:30 p.m. ET on the 16th. The target range going in is 3.50% to 3.75%, and market pricing implies a roughly 86% to 90% chance of a quarter-point increase.

The Bank of England and the Bank of Japan are expected to hand down their own rate decisions within a day or two of the Fed's, which is part of why sterling and the yen have been moving.

Earnings are light early in the week. Trip.com, the Chinese travel company, is expected to report after Tuesday's close, with an average estimate of $0.84 a share against $0.90 a year earlier. Lennar, the homebuilder, is expected after Wednesday's close, a read on how higher mortgage rates are landing on housing. Grifols and ChronoScale are expected today, and VinFast and Hub Group on Thursday. Later, the government's estimates of economic growth, personal income and corporate profits are expected Sept. 30.