US stocks are being pressured by a slowdown in AI development and FRB rate hikes, while Japanese stocks are reportedly entering a triple-whammy period of the OpenAI shock, higher crude oil prices and higher interest rates.
This article focuses on developments in the US equity market and examines how the slowdown in the pace of AI development led to declines in semiconductor and AI infrastructure stocks. Rising crude oil prices also weighed on market sentiment, and the NY Dow recorded consecutive sharp declines from 14 to 16 September.
The Federal Reserve Board (FRB) decided to raise rates by 0.25% at the FOMC on 16 September and signaled the possibility of further hikes as inflation remained elevated. The resulting rise in long-term interest rates became a burden on the stock market.
The Nikkei Average was influenced by developments in AI- and semiconductor-related stocks, falling sharply on 14 September and edging lower on 15 September, when selling in AI-related stocks was particularly pronounced. It rebounded on 16 September on futures buying by overseas short-term traders. Expectations that OpenAI's listing would be postponed also affected sentiment toward Japanese stocks.
In the Chinese market, the Shanghai Composite Index showed a wider trading range from 14 to 16 September. While affected by escalating tensions in the Middle East and rising US interest rates, domestic demand support measures and developments in AI-related stocks influenced the market's direction. Finally, the article points out that the slowdown in AI development and rising interest rates are simultaneously affecting the Japanese and Chinese stock markets.