Fed Decision Looms as 10-Year Yields Hit a 2007 Peak and AI Shares Slide

Huo Xing Finance reports: The Federal Reserve will open its two-day policy meeting this Tuesday, September 15. Markets are pricing in a 25-basis-point rate cut on Wednesday, and the implied probability of another cut in December has climbed to 75%. With inflation still running above the Fed's 2% target, Chair Kevin Warsh faces mounting pressure over the policy path. Market swings have intensified. The 10-year U.S. Treasury yield touched its highest level since 2007 in early Tuesday trading and pushed through 5% during Monday's session. Ongoing Treasury selling is adding to the Fed's challenge of containing inflation. AI-linked trades are also reversing. After several prominent AI industry leaders warned that model development needs to slow, AI-related stocks fell sharply on Monday, and widely held names such as NVIDIA came under heavy selling. President Trump made an unusual intervention at the All-In Summit, calling NVIDIA CEO Jensen Huang and dismissing market concerns about AI as "all scams," but the comments did not stop U.S. equities from weakening into the close. Oil prices continue to climb, with Brent and WTI futures both trading above $100 a barrel. Attacks by Yemen's Houthi rebels on Saudi Arabia and vessel-related incidents in the Strait of Hormuz have amplified fears of supply disruptions. The link between oil and U.S. Treasury yields is at its strongest since 2019, and U.S. stock futures edged lower after a broadly weaker session in Asian trading.