The Big Three are shouting for “deceleration”: AI beliefs are shaken, oil prices are breaking 100, and the Federal Reserve's interest rate hike is imminent — US stocks fear the most dangerous week of the year

The Zhitong Finance App notes that in the coming week, US stocks will be busy analyzing US and global macroeconomic data, primary market trends, corporate actions, global monetary policy decisions, and other major global clues.

Macroeconomic data will be the focus, and the listing of new shares will also drive the market at the individual stock level. Crude oil prices and developments in the US and Asian markets will dominate sector trends.

Foreign investors' trading activities will influence overall market trends. In this shortened trading week, market participants will proceed cautiously against the backdrop of continuing geopolitical tension and the Federal Reserve's policy decisions. The geopolitical conflict between the US and Iran and the evolution of the situation in the Middle East will dominate global crude oil price trends.

Vinod Nair, head of research at Geojit Investments Ltd, said. The macro calendar for the coming week is very intensive. Key releases include US inflation data and policy decisions from the Federal Reserve and the Bank of Japan. Together with crude oil trends, they will determine the short-term market direction. High energy prices, continued foreign capital outflows, and geopolitical uncertainty will keep volatility high.”

Federal Reserve and Bank of Japan policy decisions

The Federal Reserve will announce its monetary policy decision on September 16, and the market is highly betting that the US central bank will raise interest rates by a quarter of a percentage point. Wall Street expectations heated up further after data showed a rebound in consumer inflation in August.

Some investors believe the resolution will test Federal Reserve Chairman Kevin Walsh's anti-inflation credit—which is being scrutinized after his press conference after the July interest rate meeting. The Bank of Japan will announce the interest rate decision on September 18. The market generally expects policymakers to raise interest rates by 25 basis points to 1.25%, which will be the highest level in more than 30 years.

The Big Three shouted for “AI deceleration”, and US stock AI transactions were tested by stress

Last weekend, there was a rare event in the AI industry: Anthropic CEO Dario Amodei published a long article entitled “We Must Control the Frontier”, calling on the entire industry to slow down cutting-edge model development; OpenAI's Sam Altman and xAI's Musk immediately publicly responded. Musk said “Dario was right.” Ultraman also revealed to the media that OpenAI will not go public this year due to security concerns.

The market first fell in respect. During the Asian trading session on Monday, the MSCI Asia Pacific Stock Index fell 0.5%, and both the Japanese and South Korean stock markets experienced declines. Nasdaq 100 futures, mainly technology stocks, fell more than 1%, while S&P 500 futures fell 0.6%.

How much pressure is there in the short term?

Market sources said that chip and supply chain stocks will bear the brunt of the opening sell-off. Overvaluations, crowded transactions and macroeconomic headwinds resonate — the NASDAQ 100 has fallen more than 4% from its June high, the US chip index fell 14% over the same period, and expectations of the Federal Reserve's interest rate hike this week and geopolitical risks are driving up global financing costs. Notably, the S&P 500 and MSCI Global Index rose slightly by 0.6% over the same period, indicating that the current adjustment is highly concentrated within the AI main line.

But analysts generally don't think the long-term logic has been broken. Gary Tan, portfolio manager at Allspring Global Investments, said: “This may cause some short-term pressure, but it's unlikely to disrupt long-term AI transactions. AI is still in its early stages, and I'm not sure if other players in the ecosystem are willing to slow down as technology evolves rapidly.”

Global X Management investment strategist Billy Leung gave a more positive interpretation: “The three CEOs agreed to control the pace and won't actually reduce spending on chips, electricity, and infrastructure; in fact, this has extended the development cycle. If commercialization continues to grow and iteration slows down slightly, the focus of the industry will shift from 'spending money' to 'using existing assets to monetize. '”

Charu Chanana, chief investment strategist at Saxo Finance, pointed out that technology stock valuations are based not only on demand, but also on the expectation that the model will continue to rapidly iterate, and related pricing will face more scrutiny; however, security mechanisms will drive new investment in cybersecurity and AI monitoring tools, and storage, network, cooling, and power equipment vendors will still have ongoing projects to support performance. “More compliant and controlled R&D will make opportunities in the AI sector more sustainable”.

Cautious voices also exist. Some market participants questioned whether the “deceleration” was due to safety, or whether huge capital expenses “can't burn money” — if the latter is true, investors will have to re-examine AI pricing logic, and it is inappropriate to blindly chase higher at the current point.

In the short term, AI concept stocks that opened on Monday will inevitably be under pressure; in the medium term, the real watershed is whether this round of “deceleration” is a posture or an inflection point. In addition, Anthropic is negotiating Nvidia as a cornerstone investor and a super IPO valued at $2 trillion. Wall Street's belief in AI will be tested publicly this week.

The jump in oil prices stirred up inflation expectations, and US stocks faced a triple stress test this week

Saudi Arabia's east-west oil pipeline was shut down after being attacked by drones last week. This major artery, which has a maximum transportation capacity of 7 million barrels per day and accounts for 4% to 5% of global supply in recent months, was the only export channel for Saudi Arabia to bypass the strait of Hormuz blocked by war — now the “detour plan” itself has become a target.

Combined with the Houthis taking over Perim Island in the Strait of Mander, the attack and fire of another tanker in Hormuz on Sunday, and Oman's temporary postponement of the Iran-Gulf meeting, supply risks have accumulated on multiple lines. Oil prices jumped more than 3% on Sunday, Brent rushed to about $107.9, and the retail price of diesel in the US has broken through a record 6 US dollars/gallon.

As far as inflation is concerned, this is adding fuel to the fire. The US CPI rebounded in August, energy costs are penetrating into prices along the transportation chain, and the path of falling inflation from September to October is likely to change. The Federal Reserve's interest rate meeting is imminent on Wednesday. The market is highly betting on raising interest rates by 25 basis points. High oil prices will further reinforce hawkish rhetoric. Chairman Walsh's anti-inflation credit will be tested again, and the austerity cycle may be lengthened.

As far as US stocks are concerned, the direction is weak but the structure is divided: energy stocks (which have risen more than 30% during the year), safe-haven assets such as gold, and the US dollar benefit; high-valuation growth stocks that are sensitive to aviation, chemicals, consumption, and interest rates are under pressure. What's more difficult is that this week's market is also compounded by chip stock sell-off triggered by the “AI Big Three calling for a slowdown” (SK Hynix fell more than 4.6% and Nvidia fell 2.2% in the dark market on Sunday) and concerns about the bubble where margin debt peaked and fell back. Risk appetite is already weak.