Nasdaq Falls 147 Points as AI Safety Warning Triggers Chip Stock Rout, 10-Year Yield Hits 5% and Oil Surges Past $106

Mumbai, Sept 15: US equity markets closed lower on Monday, with the technology-heavy Nasdaq Composite bearing the brunt of a broad sell-off triggered by an unprecedented call from frontier artificial intelligence leaders to deliberately slow the pace of model development, even as a surge in crude oil prices and a spike in Treasury yields compounded downward pressure across asset classes.  

The Nasdaq Composite (^IXIC) fell 146.62 points, or 0.56%, to close at 26,186.41, recovering from an intraday plunge that saw the index drop as much as 1.3% to a session low of 25,992.54. The Dow Jones Industrial Average (^DJI) declined 152.09 points, or 0.29%, to 52,421.20, while the S&P 500 (^GSPC) shed 37.00 points, or 0.48%, to settle at 7,619.98. The Russell 2000 (^RUT) small-cap benchmark lost 11.43 points, or 0.39%, to close at 2,892.52.  

The session’s defining narrative was a rare public divergence between the architects of the artificial intelligence boom and the Wall Street capital that has underwritten it, compounded by a 10-year Treasury yield briefly breaching 5.00% for the first time since October 2023 and Brent crude surging past $109 intraday before settling near $106. 

Dow Jones Drops 152 Points as Nasdaq Composite Fall of 0.56% Sets the Session’s Tone 

The Dow Jones Industrial Average opened at 52,750.88, briefly touching an intraday high of 52,750.88 before reversing sharply to a session low of 52,278.89, ultimately closing at 52,421.20 against a previous close of 52,573.29. The 152.09-point decline represented a 0.29% loss. Within the 30-stock benchmark, Microsoft (MSFT) advanced 1.97% and Apple (AAPL) added 0.24%, while Nvidia (NVDA) fell 3.34% and Cisco Systems (CSCO) declined 1.85%, reflecting the bifurcation between software-oriented technology exposure and semiconductor-linked holdings. Financial constituents also weighed on the index, with Goldman Sachs (GS) dropping 3.94% and JPMorgan Chase (JPM) declining 1.70%, while Visa (V) gained 1.29%. The blue-chip index’s relatively contained loss compared with the Nasdaq reflected its lower concentration in semiconductor and AI-infrastructure names. 

S&P 500 Sheds 37 Points as Technology Sector Decline of 1.68% Offsets Communication Services Gain of 2.79% 

The S&P 500 opened at 7,611.44, traded within a day’s range of 7,592.28 to 7,647.99, and closed at 7,619.98 against a previous close of 7,656.98, marking a 37.00-point or 0.48% decline. The index’s performance was defined by stark sectoral divergence: the Information Technology sector fell 1.68%, led lower by Corning (GLW) with a 13.61% decline, while the Communication Services sector surged 2.79%, propelled by Alphabet (GOOGL) rising 3.22% and Netflix (NFLX) gaining 3.77%. The Health Care sector added 1.35%, with Eli Lilly (LLY) up 1.98% and Intuitive Surgical (ISRG) gaining 2.38%. The Industrials sector declined 1.44%, with GE Vernova (GEV) falling 8.65% and Eaton (ETN) dropping 7.62%.  

The Energy sector rose 1.35% as oil prices climbed. The index’s ability to close well above its session low reflected late-session buying in software and cybersecurity names, with CrowdStrike (CRWD) surging 13.85% and Palo Alto Networks (PANW) jumping 13.09%. 

Nasdaq Composite Falls 147 Points to 26,186 as Semiconductor Index Plunges 5.86% 

The Nasdaq Composite bore the heaviest losses among major benchmarks, opening at 26,018.50, reaching a session high of 26,329.98, and closing at 26,186.41 against a previous close of 26,333.04. The 146.62-point or 0.56% decline was driven overwhelmingly by semiconductor and AI-infrastructure names. The PHLX Semiconductor Sector Index (SOX) collapsed 692.72 points, or 5.86%, to 11,131.28, its worst single-session performance since early July. Nvidia (NVDA) fell 3.34%, Broadcom (AVGO) dropped 4.77%, AMD declined 4.40%, Intel (INTC) lost 5.59%, Micron Technology (MU) shed 5.25%, and ASML Holding (ASML) plunged 7.25%.  

Semiconductor equipment manufacturers were particularly hard hit, with Lam Research (LRCX) falling 8.29%, Applied Materials (AMAT) dropping 7.05%, KLA Corporation (KLAC) declining 6.39%, and ARM Holdings (ARM) tumbling 9.74%. The selling pressure was partially offset by strong gains in cybersecurity and enterprise software, with Palo Alto Networks up 13.09%, CrowdStrike up 13.85%, Fortinet (FTNT) up 9.04%, and Datadog (DDOG) up 4.00%.  

Among other Nasdaq-100 constituents, Alphabet gained 3.22%, Meta Platforms (META) rose 2.71%, Netflix advanced 3.77%, and Microsoft added 1.97%, while Amazon (AMZN) slipped 1.26% and Tesla (TSLA) declined 1.77%. 

Also Read: What Is the New York Stock Exchange (NYSE)?

Russell 2000 Slips 0.39% to 2,892 as Small-Cap Index Closes Near Session Low 

The Russell 2000 Index opened at 2,896.70, touched an intraday high of 2,908.52, and closed at 2,892.52 against a previous close of 2,903.94, registering a decline of 11.43 points or 0.39%. The small-cap benchmark traded within a day’s range of 2,885.54 to 2,908.52.  

Within the index, Beam Therapeutics (BE) fell 6.84%, STRL dropped 7.47%, Advanced Energy Industries (AEIS) declined 11.45%, and SiTime Corporation (SITM) plunged 12.16%. Gainers included Qualys (QLYS) rising 15.06% and CVLT advancing 7.80%. The Russell 2000’s relatively milder decline compared with the Nasdaq reflected its lower weighting in semiconductor and AI-linked names. 

S&P 100 Declines 0.44% as Dow Jones Composite, Transportation and Utility Averages Diverge 

The S&P 100 Index (OEX) closed at 3,786.87, down 17.12 points or 0.45%, having opened at 3,780.37 and traded within a range of 3,771.19 to 3,801.49 against a previous close of 3,803.99. The Dow Jones Composite Average (DJC) fell 27.05 points or 0.16% to 16,478.05, while the Dow Jones Transportation Average (DJT) advanced 101.52 points or 0.49% to 20,729.79, and the Dow Jones Utility Average (DJU) declined 9.46 points or 0.89% to 1,059.09. The transportation average’s gain stood in contrast to the broader market decline, while the utility average’s drop reflected sensitivity to rising bond yields. 

Philadelphia Semiconductor Index Tumbles 5.86% to 11,131 as AI Slowdown Call Hits Chipmakers 

The PHLX Semiconductor Sector Index (SOX) recorded its most severe single-day decline since early July, falling 692.72 points or 5.86% to close at 11,131.28. The index opened at 11,191.82, reached an intraday high of 11,285.30, and bottomed at 11,110.11 against a previous close of 11,824.00.  

The carnage spanned the entire semiconductor complex: Micron Technology fell 5.25%, SanDisk (SNDK) dropped 4.98%, Marvell Technology (MRVL) declined 7.32%, Texas Instruments (TXN) lost 1.97%, Analog Devices (ADI) fell 4.74%, NXP Semiconductors (NXPI) declined, and Microchip Technology (MPWR) also traded lower.  

The sell-off was triggered by weekend commentary from Anthropic CEO Dario Amodei, who published a 3,800-word essay arguing that AI companies must slow the pace of frontier model development to allow safety measures to keep pace, a position subsequently endorsed by OpenAI CEO Sam Altman. 

NYSE Composite Falls 0.52% to 24,205 While S&P MidCap 400 and SmallCap 600 Decline 

The NYSE Composite Index closed at 24,205.38, down 126.19 points or 0.52%, having opened at 24,331.56 and traded within a range of 24,173.55 to 24,331.56. The S&P MidCap 400 declined 34.93 points or 0.94% to 3,679.21, while the S&P SmallCap 600 fell 12.12 points or 0.70% to 1,714.06. The mid-cap index opened at 3,714.14 and traded as low as 3,676.40, reflecting broad-based selling pressure that extended beyond large-cap technology names. 

VIX Spikes 8.14% to 17.13 as Volatility Returns Ahead of Fed Decision 

The CBOE Volatility Index (VIX) surged 1.29 points or 8.14% to close at 17.13, having opened at 17.50, reached an intraday high of 18.17, and touched a low of 16.58 against a previous close of 15.84.  

The elevation in the fear gauge, which measures expected 30-day volatility in the S&P 500, reflected heightened uncertainty surrounding both the Federal Reserve’s policy decision scheduled for Wednesday and the escalating debate over AI development pace.   

The VIX’s move above 17 represented a notable shift from the previous session’s close of 15.84, signalling that options markets were pricing in materially greater near-term risk. 

Also Read: How to invest in US stocks

Communication Services Surges 2.79% While Technology Plunges 1.68% in Stark Sector Divergence 

The Communication Services sector was the standout performer, gaining 2.79%, propelled by Alphabet (GOOGL) rising 3.22%, Meta Platforms (META) advancing 2.71%, Netflix (NFLX) climbing 3.77%, and T-Mobile US (TMUS) adding 0.31%.  

The Consumer Staples sector rose 1.4%, with Walmart (WMT) up 1.80%, Costco (COST) gaining 1.56%, and Monster Beverage (MNST) adding 1.84%. The Health Care sector advanced 1.35%, led by Eli Lilly up 1.98%, Intuitive Surgical up 2.38%, and AbbVie (ABBV) up 1.83%. The Energy sector gained 1.35% on the back of surging crude prices, with Exxon Mobil (XOM) declining 0.56% and Chevron (CVX) falling 0.89% despite higher oil, while ConocoPhillips (COP) slipped 0.53%.  

Conversely, the Information Technology sector was the worst performer, falling 1.68%, with Corning down 13.61%, Teradyne (TER) down 13.30%, and Hewlett Packard Enterprise (HPE) down 10.76%. The Industrials sector declined 1.44%, with GE Vernova down 8.65% and Eaton down 7.62%. The Materials sector fell 1.1% and Utilities declined 1.1%, while Financials and Real Estate also traded lower. 

Cybersecurity Stocks Surge Up to 16.52% While Semiconductor Equipment Makers Plunge Over 13% 

The session’s top gainers were dominated by cybersecurity and software names that investors perceived as beneficiaries of an AI development pause. Zscaler (ZS) surged 16.52% to $191.73, Tenable Holdings (TENB) jumped 16.51% to $35.08, Rubrik (RBRK) advanced 15.64% to $100.20, Qualys (QLYS) climbed 15.06% to $172.91, SentinelOne (S) rose 14.48% to $22.61, CrowdStrike (CRWD) gained 13.85% to $235.38, and Palo Alto Networks (PANW) jumped 13.09% to $373.94.  

The top losers were concentrated in semiconductor equipment and AI-hardware names: Silicon Motion Technology (SIMO) plunged 16.76% to $236.81, Corning (GLW) dropped 13.75% to $143.52, Teradyne (TER) fell 13.30% to $329.20, MaxLinear (MXL) declined 13.12% to $64.79, MACOM Technology (MTSI) dropped 12.83% to $239.62, Coherent (COHR) fell 12.73% to $266.50, Viavi Solutions (VIAV) declined 12.72% to $33.82, and SiTime Corporation (SITM) plunged 12.16% to $558.35.  

Among the Magnificent Seven, performance was mixed: Alphabet gained 3.22%, Meta rose 2.71%, Microsoft added 1.97%, Apple advanced 0.24%, while Nvidia fell 3.34%, Amazon declined 1.26%, and Tesla dropped 1.77%. 

Financial Stocks Slide as Bank of America Drops 5.14% on Investment Banking Fee Warning 

Financial sector constituents faced broad pressure, with Bank of America (BAC) falling 5.14% to $59.47 after CEO Brian Moynihan stated at a conference that third-quarter investment banking fees are on pace to decline to $1.6 billion to $1.8 billion, down from $2 billion in the same period last year.  

Goldman Sachs declined 3.94%, Morgan Stanley (MS) fell 3.64%, Citigroup (C) dropped 1.85%, JPMorgan Chase slipped 1.70%, and Wells Fargo (WFC) lost 1.76%. The weakness in financials reflected concerns about dealmaking activity and trading revenue, with Moynihan noting that sales and trading revenue would likely be flat year-over-year. 

AI Development Slowdown Call From Anthropic and OpenAI Chiefs Triggers Market-Wide Repricing 

The session’s primary catalyst was an unprecedented intervention by leaders of the two most prominent frontier AI laboratories. Anthropic CEO Dario Amodei published an essay over the weekend arguing that ”we must slow the pace at which we improve the capabilities of AI models,” citing the need for risk-prevention measures to keep pace with capability advancements.  

OpenAI CEO Sam Altman concurred, stating in a post on X that ”we welcome a federal framework that sets consistent safety requirements for frontier AI” and warning that ”no amount of American competitive pressure should justify recklessness.” Altman further disclosed that OpenAI would not proceed with an initial public offering until 2027, stating an IPO this year would be “ill-advised” due to safety concerns. Anthropic is reportedly preparing to list on Nasdaq as early as this autumn. The commentary sent shockwaves through semiconductor and AI-infrastructure stocks, which have been the primary beneficiaries of an unprecedented capital expenditure cycle.  

However, cybersecurity and software names that had previously faced disruption fears from AI rallied strongly, with CrowdStrike and Palo Alto Networks recording their largest single-day gains in months. President Donald Trump responded on Truth Social, criticising Amodei and asserting that ”the only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT.” 

Also Read: US Stock Market Timings

10-Year Treasury Yield Breaches 5% for First Time Since 2023 as Fed Rate Hike Odds Reach 90% 

The 10-year Treasury yield briefly breached the 5.00% threshold for the first time since October 2023, touching an intraday high of 5.012% before retreating to close near 4.96%. The 30-year Treasury yield remained elevated at 5.33%, while the 2-year Treasury yield, more sensitive to Federal Reserve policy, stood at 4.62%.  

The yield surge reflected market positioning ahead of the Federal Open Market Committee’s policy meeting on Wednesday, where traders assigned a 90.7% probability to a 25-basis-point rate hike that would lift the federal funds target range to 3.75%-4.00% from the current 3.50%-3.75%.  

The anticipated hike would be the first since July 2023 and the first under Fed Chair Kevin Warsh. The repricing followed Friday’s Consumer Price Index report, which showed August headline inflation at 3.4% year-over-year and monthly core prices rising 0.3%, exceeding expectations. Goldman Sachs revised its forecast from unchanged rates to a 25-basis-point increase, while JPMorgan maintained its expectation of a hike. 

Brent Crude Surges to $106 as Saudi Pipeline Shutdown Removes 4% of Global Oil Supply 

Brent crude futures advanced 1.50% to settle at $106.18 per barrel, having briefly crossed $109 intraday, while West Texas Intermediate (WTI) crude gained 2.33% to close near $102.38 per barrel. The surge followed Saudi Arabia’s shutdown of its East-West pipeline, a critical conduit that bypasses the Strait of Hormuz and was loading approximately 2 million to 4 million barrels per day onto vessels at the port of Yanbu on the Red Sea in early September. According to market estimates, a complete halt in loadings could remove roughly 4% of global oil supply.  

The pipeline closure followed a drone attack on 11 September 2026, satellite imagery of which showed fire damage and extensive blackened areas around the pumping station. President Trump stated that Iran “wants to make a deal, quickly and badly” and that Ukraine and Russia had agreed to halt strikes on energy facilities, comments that partially tempered price gains. 

Gold Falls 1.5% to $4,284 While Silver Drops 3.3% and Copper Declines on Stronger Dollar 

Gold prices declined 1.5% to approximately $4,284 per ounce, while silver dropped 3.3% to $62.30 per ounce. Copper fell 2.66% to $6.27 per pound, touching a three-week low below $14,000 per tonne, as rising exchange inventories and a stronger dollar pressured industrial metals. Natural gas advanced 2.30% to settle at $2.8960 per million British thermal units, supported by lower domestic production and stronger liquefied natural gas exports.  

The US Dollar Index (DXY) rose 0.5% to 99.58, its highest level since 3 September 2026, with EUR/USD declining 0.3% to 1.1564, USD/JPY advancing 0.3% to 154.03, and GBP/USD slipping 0.2% to 1.3501. Bitcoin traded near $77,462, recovering from an early session low of $76,452. 

Also Read: What Are Fractional Shares?

US Economic Data Remains in Focus as Fed Decision Looms and Inflation Outpaces Wage Growth 

The week’s primary economic focus remains the Federal Open Market Committee’s policy meeting, with the rate decision scheduled for Wednesday afternoon and Chair Kevin Warsh’s press conference to follow. August Consumer Price Index data released on Friday showed headline inflation at 3.4% year-over-year, while average hourly earnings increased 3.1%, the weakest wage growth since May 2021, indicating that inflation is once again outpacing wage growth.  

Retail sales for August rose 0.6% month-over-month, with sales excluding autos up 0.7%. The session’s bond market movements reflected a market fully positioned for a rate hike, with the 10-year yield closing near 4.96%, the 30-year yield at 5.33%, and the 2-year yield at 4.62%, creating a yield curve that remains inverted at the front end but steep at the long end. 

Monday’s session was defined by the intersection of three powerful forces: an unprecedented call from AI industry leaders for a deliberate slowdown in frontier model development, a 10-year Treasury yield breaching 5% for the first time since 2023, and Brent crude surging past $109 on Middle East supply disruptions. The Nasdaq Composite’s 0.56% decline, the Philadelphia Semiconductor Index’s 5.86% plunge, and the VIX’s 8.14% spike collectively signal a market repricing risk across technology and rate-sensitive sectors ahead of Wednesday’s Federal Reserve decision. 

Source 

• https://www.nasdaq.com/ 

• spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.dowjones.com/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-industrial-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.nasdaq.com/market-activity/index/comp 

• https://www.nasdaq.com/market-activity/quotes/nasdaq-ndx-index 

• https://www.spglobal.com/spdji/en/indices/equity/sp-100/ 

• https://www.lseg.com/en/ftse-russell/indices/russell-us 

• https://www.nyse.com/index 

• https://www.nyse.com/index 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-transportation-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-utility-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-composite-average/ 

• https://www.nasdaq.com/market-activity/index/sox 
• https://www.cboe.com/tradable_products/vix/