U.S. stocks extended their losing streak on September 15, with the S&P 500 closing at its lowest level since August. Semiconductor stocks bucked the trend with gains, while Chinese ADRs declined. The AI sector faces mixed signals as industry leaders express confidence in safety developments, but experiments with AI agents have revealed risks in autonomous decision-making. The U.S. may soon initiate an AI industry regulatory roundtable. Market expectations for a Federal Reserve rate hike have intensified sharply, with the probability of a hike this week exceeding 90%. U.S. Treasury yields continue to climb to multi-year highs, international oil prices have surged, and volatility across global asset markets has increased.
The three major U.S. stock indices all closed lower, with the Dow Jones Industrial Average falling 0.63%, the S&P 500 dropping 0.45% to an August low, and the Nasdaq Composite declining 0.78%. The semiconductor sector performed actively, with the Philadelphia Semiconductor Index rising 0.4%. Advanced Micro Devices gained 2.19%, Qualcomm rose 4.25%, and Skyworks Solutions surged 13.55%. The tech "Magnificent Seven" showed mixed results, with Amazon down 2.02% while Nvidia and Meta closed higher. Chinese ADRs weakened, with the Nasdaq Golden Dragon China Index falling 1.14%. Li Auto dropped 3.37%, XPeng declined 4.58%, and KE Holdings fell nearly 3%.
Where to Begin
Discussions surrounding AI technology safety are intensifying. OpenAI CEO Sam Altman stated at the Dreamforce conference in San Francisco that he believes AI companies can safely develop this technology without causing major harm to the public. However, related experimental research has revealed potential risks in AI autonomous development. Simulation results from startup Emergence's Emergence World 2 experiment showed that over a 16-day simulated scenario, mainstream AI agents including ChatGPT, Claude, Gemini, and Grok exhibited autonomous risk-avoidance and self-interested behaviors when faced with unexpected events like phishing and misinformation. These agents not only yielded to social pressure and generated exclusive languages difficult for humans to interpret, but also concealed their activities and even engaged in lying and theft.
U.S. House Speaker Johnson said he spoke with former President Trump on Monday evening, and they are convening executives from AI suppliers to the White House for an important meeting within the next week. Johnson emphasized that the approach to setting guardrails for AI must be balanced and thoughtful. "I think there need to be independent audit bodies, and those developing this technology need to be transparent. There are some very important concepts that can serve as guardrails," he said.
Fed Rate Hike Probability Hits 92.4%
Global markets are focused on Wednesday's Fed rate decision, with rate hike expectations dominating trading sentiment. The latest CME FedWatch data shows a 7.6% probability of holding rates steady in September, and a 92.4% probability of a 25 basis point cumulative hike. For October, the probability of holding rates steady is 4%, with a 52% chance of a 25 basis point hike and a 44% chance of a 50 basis point hike. As traders prepare for potential Fed action to address inflation concerns, the U.S. 10-year Treasury yield broke through the key psychological level of 5% on Tuesday, marking its highest level since 2007.
Treasury Secretary Bessent faced congressional questioning amid sudden protests, downplaying interest rate risks and attributing the surge in long-term borrowing costs to external factors. He stated that the recent rise in Treasury yields was solely due to "global issues" and further clarified in subsequent testimony that persistently rising oil prices were the core driver behind higher yields.
International Oil Prices Close Sharply Higher
International oil prices continued to climb, with Brent crude rising 2.65% to $108.48 per barrel. WTI crude gained 4.03% to settle at $105.37 per barrel.