US Stock Market Today LIVE: Nasdaq Tumbles Over 1% As AI Slowdown Calls, $110-Oil Scares Investors

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.

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 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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JD Vance on AI:

• I don't think Americans should be scared of anything.
• I think that we have to be mindful that there are risks to anything, including AI.

The American depositary reciepts (ADR) for information technology stocks saw a surge of up to 5% on Monday, despite the slump in semiconductor companies's shares.

The ADR for firms like Infosys and Wipro increased by 2% while the ADR for Cognizant, ServiceNow and Accenture increased by 4%.

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Shares of notable semiconductor brands such as SK Hynix, Nvidia, Intel, Micron, AMD and Sandisk were in the red, slumping up to 8% during early market trade on Monday.

This comes after a major announcement from Anthropic's Chief Executive Officer (CEO) Darius Amodei and OpenAI CEO Sam Altman announced plans to slow down the pace of artificial intelligence development in order to accommodate for safety protocols and frameworks.

Shares of Intel Corp. were trading 8% lower when markets opened.

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Infosys and Wipro ADRs have risen 2%.

• The yield on 10-year Treasuries advanced two basis points to 4.98%
• Germany’s 10-year yield advanced two basis points to 3.53%
• Britain’s 10-year yield advanced five basis points to 5.40%

• Bitcoin rose 0.8% to $77,911.38
• Ether fell 0.3% to $2,505.03

• The Bloomberg Dollar Spot Index rose 0.5%
• The euro fell 0.6% to $1.1535
• The British pound fell 0.4% to $1.3475
• The Japanese yen fell 0.8% to 154.88 per dollar

AI favorites Nvidia and Broadcom both dropped 3%, while Advanced Micro Devices, Intel, and Marvell Technology suffered steeper losses of 5%, 7%, and 8%, respectively.

Brent crude prices spiked to $110 per barrel on Monday, after reports said that Saudi Arabia's East-West pipeline, which came under attack this week, will remain out of service for a considerable time to come.

The benchmark was up around 5% as attacks and the closure of a key Saudi pipeline added to the impact of the Iran war.

The immediate trigger was Saudi Arabia's shutdown of its 1,200-km East-West pipeline after drone strikes launched from Iraqi territory damaged the crucial oil route.

Dow Jones fell 0.31% 0or 16512 points to 52,308.93, S&P 500 was down 0.74% or 55.27 points at 7,601.71 and Nasdaq slipped 1.22% or 317.04 to 26,018.23. This comes amid a sharp rise in oil prices, renewed concerns over interest rates and weakness in AI-linked stocks weighed on investor sentiment.