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On the 14th, U.S. 10-year Treasury yields exceeded the psychological resistance level of 5% as of local time. This marks the first time in nearly three years since October 2023. The ongoing rise in prices and international oil prices exceeding $100 per barrel have heightened inflation concerns. The market is anticipating a 90% chance that the Federal Reserve (Fed) will raise the benchmark interest rate by 0.25 percentage points in the early hours of the 17th. If this hike occurs, the U.S. benchmark rate is expected to reach 4% annually.
Experts predict that additional rate hikes may occur in October and December, warning that the Fed will take all necessary measures to curb inflation. Alongside this rate burden, the spread of the argument for slowing down AI development has significantly impacted semiconductor stocks. As big tech CEOs advocate for a slowdown in AI development, concerns about decreased semiconductor demand have intensified.
As a result, stocks of companies like Nvidia, Broadcom, AMD, and Intel have shown a downward trend, with the Philadelphia Semiconductor Index plummeting more than 5% during trading. The tech-heavy Nasdaq also continued its decline. The New York Times noted that the current market situation is reminiscent of the time in 2007 when 10-year yields reached 5.3%, warning that if AI innovation fails to meet expectations, it could pose a threat to the overall economy.