- US stocks opened sharply lower on September 14 amid surging oil and rate hike concerns
- Nasdaq fell 1.1%, S&P 500 declined 0.59%, Dow Jones dropped 0.26% early in trading
- Semiconductor stocks like Nvidia, SK Hynix, and Micron saw significant declines
US stocks opened sharply lower on Monday, September 14, as investors reacted to surging oil prices, fresh warnings from AI leaders and rising expectations of a Federal Reserve rate hike. The Nasdaq fell 1.1% at the open, while the S&P 500 declined 0.59%. The Dow Jones initially gained but soon turned lower by 0.26%.
The pressure was particularly strong across semiconductor stocks. At around 9:40 am ET, Nvidia fell 4.2%, SK Hynix dropped 7.5%, Micron Technology declined 7.4%, AMD slipped 5.8% and Broadcom lost 3.9%, according to the market data shown above.
The three primary reasons behind the selloff are rising Fed bets, with traders pricing nearly a 90% chance of a rate hike this Wednesday; along with investors' concerns over top AI companies' pitch to slow down the technology's development; and the fears of a spike in inflation due to Brent crude oil hitting $110 per barrel.
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Brent Crude Surges Towards $110
Brent crude climbed above $108 and approached the $110 per barrel mark after fresh attacks disrupted Saudi energy infrastructure. Brent futures rose more than 3% on Monday, while WTI also gained over 3%.
A key concern is the shutdown of Saudi Arabia's East-West pipeline. The route provides an alternative for transporting Saudi crude when shipments through the Strait of Hormuz face disruptions.
Higher oil prices can feed directly into inflation. That could make it harder for the Fed to ease monetary policy and increase pressure on interest-rate sensitive stocks.
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Dario Amodei Warns About Rapid AI Development
Anthropic CEO Dario Amodei has urged AI companies to slow development and give safety systems time to catch up.
Amodei warned that AI agents could potentially gain the ability to control large parts of the internet within six to 12 months. He called for external safety evaluators, stronger international coordination and additional safeguards.
The comments have raised concerns about whether an AI development slowdown could reduce the enormous capital spending driving demand for advanced chips. That directly affects Nvidia, AMD, Micron and other semiconductor companies.
Fed Rate Hike Bets Rise to Around 89%
Markets are pricing in roughly an 89% probability of a 25 basis point Fed rate hike at the September 15-16 meeting. Major banks including Goldman Sachs and JPMorgan are also expecting a quarter-point increase.
A higher Fed rate could increase borrowing costs and reduce the valuation appeal of high-growth technology stocks.
With oil near $110, AI investment concerns rising and rate-hike expectations elevated, Wall Street could remain under pressure through Monday's session.
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