The bond market sell-off intensified, high interest rates became the new normal, and U.S. bond yields hit multi-year highs. The three major U.S. stock indexes all fell, with the AI and technology sectors leading the decline. NVIDIA's repurchase of US$150 billion was still unable to resist the selling pressure. Gold plummeted nearly 4% as the market focused on the path of the Federal Reserve to raise interest rates and the risks of AI capital expenditure. The 2-year/10-year interest rate spread narrowed to the lowest since early 2025, and the curve is approaching the inversion critical point.
Every Monday to Friday morning, we focus on macroeconomics, US stocks, AI, precious metals and crude oil, use data to review the market, and use trends to seize opportunities. Produced by PANews.
As the bond market sell-off deepens, high interest rates are becoming the new equilibrium
All three major indexes fell on Monday, with the Dow Jones Industrial Average closing down 0.67%, the Nasdaq Composite closing down 0.92%, and the S&P 500 closing down 0.77%, erasing all gains for the month. The core driver is that U.S. bond yields are rising across the board and the U.S.-Iran stalemate has pushed up energy inflation expectations.
Crude oil fluctuated repeatedly amid the U.S.-Iran news, with Brent remaining near $105 a barrel and WTI rising 0.5% to $92.91. The resumption of exports from Saudi Arabia's East-West Pipeline has depressed oil prices. Rumors of explosions in Saudi cities have pushed up oil prices. Reports of "Iran agreeing to suspend uranium enrichment" have also depressed oil prices. Subsequently, "huge differences between the United States and Iran" have caused oil prices to rebound.
The 10-year U.S. Treasury yield rose about 8 basis points to 5.27%, the highest since mid-2007; the 30-year U.S. bond yield rose above 5.5%, setting a new high since 2002. Real interest rates broke through simultaneously, reaching the highest level since the 2008 financial crisis. The 2-year/10-year interest rate spread narrowed to the lowest since early 2025, and the curve approached the critical point of inversion.
At present, the stock-bond yield gap has been inverted, rarely seen in 25 years, and investors' room for error in corporate earnings has narrowed significantly. Stock earnings yields, measured by the inverse of the S&P 500 price-to-earnings ratio, have been overtaken by 10-year Treasury yields, and the attractiveness of bonds relative to stocks has climbed to its highest level in about 25 years. Yale economist Robert Shiller's cyclically adjusted excess CAPE model warns that the S&P 500 may outperform bonds by only about 1% per year over the next decade.
The interest rate swap market has fully priced in at least three 25 basis point interest rate hikes in the next 12 months, with the possibility of a fourth. Simon Penn of UBS warned that the Federal Reserve had never raised interest rates one month before the midterm elections. It would be more reasonable to hold on unchanged on October 28 and then take action in December. The cumulative interest rate hike expectations in the next year may fall from 91 basis points to 75 basis points. Federal Reserve Board Governor Cook said that inflationary pressures caused by AI and conflicts in the Middle East have not subsided, and AI productivity improvements will not be enough to offset this year's inflation. Interest rate cuts may push up inflation; Barkin said that low unemployment supports consumption, and AI cannot be said to be immune to interest rate pressures; Hassett said that the three-month annualized core inflation is close to the target.
The U.S. dollar strengthened slightly to about 101 due to the rise in yields. Gold plummeted about 4%, reaching a low of nearly $4,110 per ounce, hitting its lowest level in nearly two months; silver simultaneously fell about 6%. Saxo Bank's Ole Hansen said the weakness in gold prices reflected soaring bond yields, a stronger U.S. dollar and technical selling, and could be amplified by profit-taking ahead of China's National Day holiday. According to information from the Goldman Sachs trading desk, buying orders from sovereign and institutional buyers have been planned around $4,000.
In addition, Trump also announced Mesabi Metallics' approximately US$15 billion steel plant plan, saying it is the largest similar project in U.S. history. It will be put into operation in 2030 and will eventually produce 10 million tons per year, supporting 6,000 construction jobs and at least 1,750 permanent jobs; steel tariffs have been increased from 25% to 50%. In the copper market, Deutsche Bank's Daniel Ghali predicts that copper prices will rise to US$22,050 per ton in the second quarter of 2027, which is more than 50% higher than the LME's US$14,458.50 on Monday. The average price in 2027 will be US$20,900 and will fall by US$18,500 in 2028. The stockpiling in the United States may lead to the retention of 1.3 million tons of copper before the end of the year. The US and Asia stocks account for 71% of the world, and the free circulation inventory at the end of 2028 is nearly zero. Former Goldman Sachs Jeff Currie's "go long and fasten your seat belts" and Stifel metals analysts' supply tightening judgments are making "owning the bottleneck" a new theme on Wall Street.
The AI narrative shifts from carnival to scrutiny, with technology and storage leading the decline
Technology and AI-related sectors became the most vulnerable sectors yesterday, with the Philadelphia Semiconductor Index falling by about 1.6%, and storage and optical communications generally falling. Defensive sectors such as consumer necessities and medical care were relatively resilient, with discretionary consumption, finance and technology leading the decline. The number of stocks at new lows on the New York Stock Exchange has exceeded new highs for 10 consecutive trading days. The Goldman Sachs trading desk rated the day's activity as "3 out of 10", and institutions have a clear tendency to sell.
Despite intensive capital actions in the AI field, market selling sentiment remains difficult to reverse.
Nvidia announced that its board of directors approved an additional US$150 billion in repurchase authorization, totaling US$235 billion, setting a historical record for US companies. Huang Renxun said that it reflected confidence in the long-term opportunities of AI and strong cash flow; the company also released two open source tools to control out-of-control AI agents. At the same time, AMD announced the acquisition of World Labs, co-founded by Li Feifei, in an all-stock transaction of approximately US$8.2 billion. Li Feifei will serve as executive vice president and chief scientist, reporting directly to Su Zifeng, aiming to strengthen the spatial intelligence and physical AI layout and benchmark the NVIDIA ecosystem.
Meta Zuckerberg announced the launch of the "Meta Enterprise Platform" enterprise platform, positioning it as "the next important business pillar", integrating Muse agents, APIs and coding tools, and poaching MongoDB President and CEO CJ Desai to take charge and report directly to him. Desai left MongoDB after less than a year, just one day before the investor day, triggering market concerns about strategic continuity.
In addition, OpenAI canceled the GPT-6.1 Astra model that was scheduled to be released due to security issues discovered in internal testing. The model showed higher deception in alignment tests. Anthropic, which had previously called for slowing down the development of AI with OpenAI, released the faster and lower-cost Sonnet 5.5 (priced at half the price of Opus 5.5), and disclosed the prospectus: revenue for fiscal year 2025 is US$4.59 billion (+1088% year-on-year), but operating losses exceed US$8 billion, and plans to invest more than US$500 billion in cloud and infrastructure in the future. It is worth noting that its approximately 80 pages of risk factors clearly warn that the model may produce "catastrophic or even existential threats" including resisting shutdowns and manipulating information. Its current valuation is aimed at more than 2 trillion US dollars.
"Big Short" Michael Burry warned that the AI bubble may burst earlier than expected. He is currently shifting his short positions to put options expiring in June 2026 and September 2027, covering Micron, Nebius, Philadelphia Semiconductor Index ETF SOXX and Palantir. He cited research saying that AI revenue may fall below the capital expenditures supporting its development in one quarter.
Specific project actions and stock price fluctuations:
NVIDIA rose 1.68%: The company announced an additional US$150 billion in repurchase authorization, with the total authorization amount rising to US$235 billion, and the plan is sustainable until January 2028; Huang Renxun said this reflects the company's confidence in the long-term opportunities of AI.
The semiconductor sector all fell: the Philadelphia Semiconductor Index fell by about 1.61%, ARM fell by 8.70%, Qualcomm fell by 7.17%, Intel fell by 5.67%, AMD fell by 3.61%, Broadcom fell by 0.92%, and TSMC rose by 0.50%.
Meta fell 4.79%, and MongoDB plummeted 18.46%: Meta launched an enterprise AI platform and hired MongoDB CEO to take the helm. Investors took profits after rising for five consecutive weeks and accumulating more than 25% in September; MongoDB suddenly left the CEO, and the market was worried about strategic continuity and AI revenue opportunities.
The cybersecurity sector bucked the trend and strengthened: benefiting from AI model security, enterprise platform security and rising geo-network risks. Palo Alto Networks rose nearly 5%, Zscaler rose more than 3%, Okta rose more than 3%, CrowdStrike rose nearly 3%, Cloudflare and Feita Information rose more than 1%.
Micron fell 2.61%: Market expectations were high before the earnings report. At the same time, Michael Burry disclosed that he would convert Micron's short position into a put option expiring in June next year, strengthening the market's concerns about the storage cycle and the sustainability of AI demand. Related storage concept stocks fell, with SK Hynix falling by more than 5%, SanDisk falling by 3.65%, Rambus falling by nearly 3%, Western Digital falling by 0.78%, and Seagate rising by 0.51%.
The optical communications sector was sold off, and the market realized the early gains in the AI computing power chain after the U.S. bond yields surged. Credo fell by nearly 9%, Coherent fell by more than 4%, Astera Labs fell by nearly 4%, Marvell Technology fell by 3.83%, Corning fell by 3.29%, Ciena fell by more than 3%, and Lumentum fell by 2.16%.
AMD fell 3.61%: $8.2 billion acquisition of World Labs, Li Feifei will join AMD. In the long term, it will help AMD complement the world model, robot and physical AI ecosystem, but in the short term the market is more cautious about large-scale mergers and acquisitions and AI capital expenditures in a high interest rate environment.
Qualcomm fell 7.17%: Although the company said it is expanding the Snapdragon platform to smart watches, smart glasses, wireless headsets and other personal AI devices, and evaluating Samsung's 2nm process for next-generation chips, the market is more concerned about rising interest rates and pressure on AI hardware valuations in the short term.
SpaceX fell 2.16%: Starship achieved Earth orbit for the first time and deployed 26 new-generation Starlink V3 satellites. However, the mission was originally planned to last about 10 hours, but ended prematurely after about 3 hours in orbit.
Tesla fell 3.94%: Musk said that the Roadster event was rescheduled to October 15 due to weather conditions. At the same time, the New York City Council issued a subpoena to Musk regarding the investigation of AI safety risks, requiring him or SpaceXAI representatives to testify.
Apple fell 0.78%: The market is concerned about serious system vulnerabilities related to iPhone 18 Pro and Pro Max Face ID, as well as the pressure of being ordered to pay more than US$5.7 billion in damages in patent litigation.
Microsoft fell 1.35% (Dr. Zhang Qi became chairman of Microsoft Asia Pacific R&D Group, and Dr. Wang Yongdong retired);
Google fell 0.34% (Finland’s $15.2 billion investment failed to offset market pressure);
Gold mining stocks generally fell: spot gold fell by nearly 4%, silver fell even more heavily, and precious metal mining stocks were forced to destroy valuations. Goldfields fell by nearly 13%, Erich Gold fell by nearly 6%, Newman Mining fell by more than 4%, Endeavor Silver fell by more than 4%, and Kinross Gold fell by nearly 4%.
Stocks with strong night trading performance: NanoVisas Semiconductor rose nearly 13% in night trading. The company won the US Army Research Laboratory ALATTIS project and will develop next-generation 10kV silicon carbide power semiconductor technology for defense applications; Summit Therapeutics rose more than 18%. AstraZeneca plans to strategically invest US$2 billion in Summit. The subscription price is 18.6% higher than the closing price. The two parties will also explore the combination of treatments such as Evosi and AstraZeneca ADC.
Next things to pay attention to:
September 29 (Tuesday)
Trump, the Speaker of the House of Representatives and technology company executives plan to hold an AI conference, and the AI-driven website America.gov will reportedly announce that Musk, Huang Jensen and others are expected to attend. Pay attention to federal government procurement, AI safety and regulatory standards, not just the volume of the conference; the specific attendance list and arrangements are still to be confirmed.
The G20 Trade Ministerial Meeting will be held from September 29 to October 1, and the U.S. Trade Representative is expected to participate; the U.S. import ban on some Canadian goods is scheduled to take effect on the 29th. Pay attention to the U.S.-Canada trade friction and supply chain reactions, and pay attention to when the implementation details of the new China-U.S. Trade and Investment Council and the reciprocal tax reduction arrangement will be announced.
September 30 (Wednesday)
0:30 OpenAI DevDay is held in San Francisco: CEO Altman is expected to give an opening speech at 1:00. OpenAI is expected to release GPT-6 Cyber, AI development tools and more products. The market is particularly concerned about "O", ChatGPT Pro Max and AI hardware rumors. If product capabilities and commercialization paths exceed expectations, it may further stimulate demand transactions for AI software, cloud computing and computing power.
Huawei's Ascend 950 intelligent computing cluster plans to provide services to Chinese customers: focusing on actual delivery capabilities and customer adoption, rather than just looking at inference performance targets.
Fed officials began to speak intensively: Goolsby, Musallem, Williams and others appeared in succession, followed by Barkin, Collins, Schmid and Cook. Focus on how they weigh the energy shock against the employment slowdown; hawkish rhetoric could once again push long-term yields higher.