TradingKey Daily Market Briefing: Fed Raises Rates by 25 Bps, May Hike Again This Year; Gold Tumbles as Intel Rises 4%

Tracking Market Trends

TradingKey - On September 16, Eastern Time, US stocks rose before pulling back following the Federal Reserve's rate decision announcement for September. The Fed unanimously decided to raise interest rates by 25 basis points, lifting the target range for the federal funds rate to 3.75%–4.00%, marking its first rate hike since 2023. At the same time, the latest rate projections showed that a majority of officials expect another rate hike later this year. Hawkish policy signals pushed the US dollar and Treasury yields higher, with the Dow and S&P 500 extending losses late in the session.

At the close, the Dow Jones Industrial Average fell 1.21% to 51,467.14; the S&P 500 Index dropped 0.45% to 7,551.81; and the Nasdaq Composite Index edged down 0.01% to 25,978.42.

Among individual stocks, Intel (INTC) rose 4.03%. Reuters reported that SK Hynix is in discussions with Intel regarding potential cooperation to produce memory chips in the United States for the first time, including leasing part of the capacity at Intel's Ohio plant or establishing a joint venture with Intel and cloud computing companies.

Energy stocks weakened significantly as oil prices pulled back. ExxonMobil (XOM) fell 3.54%, Chevron (CVX) dropped 2.86%, while Devon Energy (DVN) and ConocoPhillips (COP) both fell over 5%. Robinhood (HOOD) dropped 5.46%, as crypto regulatory uncertainty continued to weigh on related stocks after the US Senate failed to advance the Clarity Act.

In commodities, international crude oil prices pulled back from previous highs but remained above $100. Brent crude (UKOIL) fell 2.64% to settle at $105.61 per barrel; WTI crude (USOIL) dropped 3.28% to close at $102.03 per barrel. Saudi Arabia supplied more crude to Asian refiners via Oman's Sohar port, somewhat easing supply concerns caused by export disruptions at Yanbu; meanwhile, US commercial crude inventories decreased by only 640,000 barrels last week, below market expectations for a 1.62-million-barrel draw.

In precious metals, gold (XAUUSD) pulled back significantly following the Fed's rate hike. Spot gold briefly fell to $4,235.44 after the decision, having earlier broken above $4,365 intraday. After the Fed signaled further rate hikes, a stronger US dollar and real interest rate pressures re-emerged as key drivers for gold prices.

In cryptocurrencies, Bitcoin (BTC) fluctuated between $75,000 and $76,500 following the Fed's decision, last trading at $76,400, while Ethereum traded near $2,425. As the rate hike had already been largely priced in by the market, immediate post-decision volatility was relatively limited. However, signals of further tightening from the latest dot plot leave crypto assets facing a persistent high-interest-rate environment.

Market News

The Fed raised interest rates by 25 basis points and signaled that it may continue tightening policy later this year. The Fed unanimously decided to raise the target range for the federal funds rate to 3.75%–4.00%. The latest quarterly projections show that 16 of the 18 officials submitting forecasts expect at least one more 25-basis-point rate hike before the end of 2026, with the median policy rate corresponding to 4.00%–4.25%, and projected to remain at this level in 2027. The Fed also raised its PCE inflation forecast for the end of 2026 from 3.6% to 3.7% and revised its GDP growth forecast up from 2.2% to 2.3%.

U.S. retail sales surged 1.2% month-on-month in August, while core retail sales grew 1.4%. Data from the U.S. Department of Commerce showed that August retail sales rose 1.2% month-on-month, significantly higher than the market expectation of 0.8% and marking the largest gain since March; core retail sales grew 1.4%, also far exceeding the 0.4% forecast. The strong consumer spending data prompted Goldman Sachs to raise its forecast for U.S. third-quarter annualized GDP growth to 3.0%, while JPMorgan revised its forecast up to 3.5%.

U.S. import prices rose 7% year-on-year, showing inflationary pressures have yet to ease noticeably. Import prices rose 0.7% month-on-month in August, higher than the market expectation of 0.4%; the year-on-year increase reached 7.0%, the highest since August 2022. Among them, prices for imported computers, peripherals, and semiconductors jumped 19.1% year-on-year, indicating that the AI investment boom is also impacting the costs of certain capital goods.

SK Hynix in talks with Intel to produce memory chips in the U.S. for the first time. Sources said the two sides are discussing various options, including SK Hynix leasing part of the capacity at Intel's Ohio plant, or forming a joint venture with Intel and major cloud computing companies. Negotiations remain exploratory, with no final decision made yet. If the deal moves forward, it would mark SK Hynix's first time manufacturing memory chips on U.S. soil.

Apple reportedly considers returning to the server market using Nvidia technology. Apple (AAPL) is developing AI inference servers powered by its self-developed M8 Ultra chip and considering using Nvidia's (NVDA) NVLink Fusion interconnect technology. The project could launch as early as 2029, though it remains subject to adjustments or cancellation. If implemented, it will mark Apple's re-entry into the dedicated server hardware market after exiting the Xserve product line in 2011.

OpenAI to regularly disclose anomalous AI model behavior. OpenAI announced the establishment of a new framework for tracking and disclosing model misalignments, releasing six case studies of anomalous or concerning model behavior observed over the past six months. The company stated that as the autonomous capabilities of AI agents increase, the industry has yet to fully solve the problems of model alignment and behavioral control.

U.S. House passes first bill targeting data center power costs. The House of Representatives passed the Ratepayer Protection Act by a vote of 417 to 3, requiring state public utility regulators to evaluate whether high-power users such as large data centers should bear the additional costs of building new power infrastructure for them. This marks the first time the U.S. House of Representatives has passed federal legislation directly addressing the economic costs of AI data centers.

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