Grim Monday: AI Fears Spook Tech, Oil Spikes Again

Published as of: September 14, 2026, 9:16 a.m. ET

(Monday market open) AI stocks slammed the brakes early after a weekend of rising fears about the technology. OpenAI's leader said the firm would likely delay its initial public offering following warnings of possible worst-case AI scenarios. Away from tech, the view also looked unimpressive. Oil prices spiked thanks to intensified fighting in the Gulf, attacks shutting down a major Saudi pipeline, and postponement of talks between Iran and the Gulf States.

All this followed Friday's hot inflation report that lifted odds of a Federal Reserve rate hike this Wednesday. Chances are 88%, according to the CME FedWatch Tool. The 10-year Treasury note yield is on the verge of 5% for the first time since 2007. The question is whether the Fed has just one hike in its pocket or might follow up with another later this year, but Fed Chairman Kevin Warsh isn't a fan of tipping his playbook.

Last Friday, major indexes rebounded from four days of losses despite rising rate hike odds, possibly because the Consumer Price Index (CPI) data removed Fed ambiguity. Markets tend to flinch from uncertainty. Help also came from falling oil, while a notable theme last week was sector rotation as health care and financials retreated from their leadership and energy gained. For the week, the S&P 500 Index fell 0.8%.

1. AI suffers another blow: It's more than a month until Halloween, but the tech sector is spooked today by worries about possible dire scenarios associated with AI. Early last year, the sector shuddered after China's Deep Seek AI model was introduced, raising competition worries. It was short-lived but still sent the PHLX Semiconductor Index (SOX) down 9% quickly. From that low to the June 2026 high, the SOX gained more than 200%, though fears of Chinese competition haven't vanished. Chip stocks suffered another speed bump last year when President Trump announced tariff "liberation day." Things haven't been great lately for the SOX, however, as it approached Monday's session down about 19% from the all-time high three months ago. The difference now is the time of the quarter. The previous selloffs came in January and April 2025, just as earnings season was starting and companies could tout strong results and guidance. This time, it's a major earnings lull and none of the AI and chip companies have reports scheduled for a while. The fear is that this new scare might slow spending on data centers, chips, and computer equipment that's been a dramatic tailwind for the entire market and economy since 2022.
    
2. 10-year yield likely to touch 5%: The last time the U.S. 10-year Treasury note yield hit 5% was in July 2007, though it came close in November 2023. It's likely to hit 5% again as soon as today. "We believe upside is limited, but we won't be surprised if the 10-year yield does touch 5%," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "A Fed rate hike may be needed to prevent long-end yields from rising significantly higher, as credibility may be on the line." In August, Fed Chair Warsh delivered hawkish remarks. Failure to hike rates now—after August core monthly inflation excluding food and energy rose a higher-than-expected 0.3%—would likely be judged harshly by market participants, who could punish with even higher yields if Warsh doesn't back talk with action. The timing also backs Warsh into a corner. This week's meeting is the last chance for the Fed to hike on its regular schedule before late October, which narrowly precedes November's mid-term election. A hike then might be politically unpalatable. Meanwhile, Schwab experts now expect at least one Fed rate hike this year, with the first likely this week.
    
3. Sentiment sags: Consumer confidence weakened in September as inflation worries mounted, according to the preliminary results of the University of Michigan's survey of consumers. The Index of Consumer Sentiment fell to 47.8, its second-lowest reading on record, missing analysts' expectations of 51.5 and dropping from 51.7 in August and 55.1 a year earlier. Meanwhile, as energy prices continue higher, projections for year-ahead inflation spiked to 4.6% from 4% last month and 3.4% in February, before the Iran war. "With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come," survey director Joanne Hsu said. The final September reading, due September 25, may help shed light on whether this decline reflects a temporary hit or a more prolonged shift in sentiment. The Fed may also be monitoring these numbers, as it wants to see that inflation expectations are well-anchored. When inflation expectations get out of hand, consumers tend to front-load buying decisions hoping to get ahead of higher prices. In a worst-case scenario, this can cause price spikes when demand outpaces supply, reinforcing inflation growth.

• AI infrastructure and chip stocks fell sharply this morning on concerns about a possible industry-led slowdown of development. Stocks hit hardest included Intel (INTC), Marvell Technology (MRVL), Advanced Micro Devices (AMD), SK Hynix (SKHY), Lumentum (LITE), and Arm Holdings (ARM).
   
• On a different note, stocks focused on cybersecurity climbed today. These included CrowdStrike (CRWD) and Palo Alto Networks (PANW) both rising more than 5%. Zscaler (ZS) rose 4% early.
   
• The biggest tech stocks, including Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) were mixed, with Nvidia down 2% but Apple and Microsoft up slightly. Apple is often seen having less AI exposure than some of the other mega caps. In one sign that AI isn't necessarily on hold, Nvidia is in talks to invest in Anthropic's IPO, Reuters reported. And Anthropic has chosen to list on Nasdaq (NDAQ), Business Insider reported.
   
• Crypto-related stocks including Coinbase (COIN) climbed early. The Senate is set to hold a key procedural vote Tuesday on the Clarity Act, which would establish a new regulatory framework for cryptocurrencies and other digital assets.
   
• Software stocks, which frequently trade opposite of AI and chip names, rose this morning. ServiceNow (NOW) climbed almost 5% while Salesforce (CRM) added 3%.
   
• Goldman Sachs (GS) and Morgan Stanley (MS), the two banks expected to lead OpenAI's IPO, both fell this morning after OpenAI leader Sam Altman told Fortune that due to concerns about AI safety, it's an "ill-advised moment" to go public.
   
• SpaceX (SPCX) rose more than 2% after Morgan Stanley reiterated its overweight rating.
   
• Technically, the S&P 500 Index continued to pivot last week near its 50-day moving average of just below 7,600. Some of Friday's strength might have reflected the S&P 500's ability to defend 7,600 earlier in the week. "Looking at the slope of the 50-day moving average, it's suggestive of a continuing uptrend," said Jim Ferraioli, director of digital currencies research and strategy at the SCFR, in his Weekly Trader's Outlook.

Credit card mistakes to avoid: While the rewards may be tempting, beware of these five credit card mistakes and learn some ideas on how to help avoid them

Though the S&P 500 Equal Weight Index (SPXEW—candlesticks) has performed well over the last year, it still trails the S&P 500 Index (SPX—purple line), suggesting mega caps remain in the driver's seat with their large weighted impact on the market. The gap has actually widened over the last few weeks as market breadth narrowed.