Market review from UTEX — week 38
AI concerns and the rate decision. What to expect from markets this week.
Major stock indexes ended last week lower: SPY lost 0.77%, while the Nasdaq fell 0.57%. As usual, the tech sector performed best: Dell Technologies +8%, Advanced Micro Devices +8%, SK Hynix and Intel +7% each. The biggest declines came from two major pharmaceutical companies — Novartis (-14%) and Amgen (-13%).
The main event this week is Wednesday’s Fed meeting, when the interest rate decision will be announced. Recent data showed that the labor market remains relatively resilient: more jobs were added in August than expected, while economists revised June and July employment figures higher. According to CME FedWatch, the probability of a 25-basis-point rate hike has risen to 86.5%, from just 58.6% a week ago. Ahead of the meeting, Trump said that “the United States should have the lowest interest rates in the world.”
On Sunday, OpenAI CEO Sam Altman officially confirmed that the company had abandoned plans for a 2026 IPO. He cited serious concerns about AI safety and uncontrolled development as the main reason. Earlier, Altman told Fortune that even a 10% chance of AI causing human extinction by the end of the decade was completely unacceptable.
OpenAI’s decision coincided with a major essay by Anthropic CEO Dario Amodei, who warned about the risks of recursive self-improvement in AI models. Industry leaders, including Elon Musk (xAI) and Demis Hassabis (Google DeepMind), unexpectedly agreed that the AI race needs to slow down to allow more time to develop effective control mechanisms.
Some investors are already concerned that statements from Altman and Amodei could have a significant impact on stocks of companies with exposure to AI.
“AI-related stocks will be down more than 10% Monday morning. Brace for impact, friends. Dario Amodei just destroyed the prevailing AI investment narrative with his blog post,” tech investor Jason Calacanis wrote on X.
The earnings calendar is extremely light this week. Among major companies, the only notable name is Lennar, the third-largest U.S. homebuilder by market capitalization.
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