TLDR
- The 10-year Treasury yield hit 5.022%, its highest level since 2007
- S&P 500, Dow, and Nasdaq futures all fell early Tuesday
- The Fed is expected to raise rates by 0.25% on Wednesday
- Nvidia dropped 3% and Corning fell 13% after AI executives called for slower development
- Oil prices rose, with Brent crude trading above $107 a barrel
U.S. stock futures fell early Tuesday as the 10-year Treasury yield climbed above 5% for the first time since 2007, putting pressure on equities ahead of a key Federal Reserve decision.
S&P 500 futures dropped 0.38%, Dow Jones futures fell around 240 points, and Nasdaq 100 futures declined 0.46%.
The 10-year yield rose to 5.022% by early Tuesday morning, up 10 basis points. Bond yields and bond prices move in opposite directions.
In regular Monday trading, the Dow fell 152 points, the S&P 500 lost 0.5%, and the Nasdaq slipped 0.6%.
Fed Rate Decision in Focus
Fed funds futures show around a 92% chance the central bank will raise rates by 25 basis points on Wednesday. That would push the upper bound of the target rate range to 4%.
The odds of a rate hike are now 94% 🚨 🚨 Seems close to a done deal now 👀 pic.twitter.com/RJ86QFvghh
— Barchart (@Barchart) September 15, 2026
Christopher Hodge, chief economist at Natixis CIB Americas, said the Fed is expected to make clear the move does not commit it to further hikes. He said Chairman Kevin Warsh will likely give the committee flexibility to react to future economic shocks.
Higher rates are a headwind for technology stocks, which are valued based on future earnings. When government bond yields rise, those future earnings are worth less in today’s dollars.
Barclays strategists said the 5% threshold on the 10-year yield is a historically important level. They warned that if yields move higher, earnings growth may not be enough to keep equity valuations stable.
AI Slowdown Calls Hit Chip Stocks
A wave of comments from AI executives added to market pressure. Anthropic CEO Dario Amodei called for a slower pace of AI development over the weekend. OpenAI CEO Sam Altman also ruled out an IPO this year, pointing to safety concerns.
I agree with Dario that we need to pace the frontier. This has been a primary topic of discussions we've had at OpenAI in recent weeks.
Committing to having independent evaluators with employee-like access is a great idea, and we will do the same. We'll have more to share soon. https://t.co/1YhhIybZX7
— Sam Altman (@sama) September 12, 2026
The Philadelphia Semiconductor Index fell over 5% on Monday. Nvidia dropped 3% and Corning tumbled 13%. The iShares AI Innovation and Tech Active ETF fell nearly 4%.
A slowdown in AI development would mean lower spending on chips and data centers, cutting into revenues that have driven a multi-year rally in tech stocks.
Software stocks moved higher, as slower AI development eases fears of disruption in that sector.
President Trump pushed back against calls to regulate AI and reportedly called Nvidia CEO Jensen Huang to encourage data center construction.
Oil prices added to market concerns. Brent crude rose to $107.55 a barrel and West Texas Intermediate traded near $103.36 after Saudi Arabia shut a key pipeline. The closures raised inflation worries tied to energy costs.
Asia-Pacific markets were mixed. Japan’s Nikkei 225 was flat, South Korea’s Kospi fell 0.74%, and Australia’s S&P/ASX 200 dropped 0.8%.
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