Oil Price Plunge and Nvidia Shock: Wall Street Signals Ahead of Fed Meeting

On US trading hours on the 27th, the New York markets closed mixed. The S&P 500 ended at 7,413.18, up just under 0.1%, and the Dow rose 0.5% to 52,210.08. By contrast, the Nasdaq fell 0.2% to 24,932.08, extending its four-day losing streak.

What drove the session was a sharp drop in oil prices amid developments in the Middle East. Over the weekend, the US and Iran agreed to halt mutual attacks and resume negotiations, sending Brent futures down 6.3% in one day to $85.87 per barrel, while West Texas Intermediate slid more than 7%. The perception that inflationary pressures could temporarily ease pushed the 10-year Treasury yield from 4.69% to 4.65%, but worries over higher prices driven by the Iran conflict and new Trump-era tariffs prevented a surge in expectations for early Fed easing.

The Fed will decide its benchmark rate at the Federal Open Market Committee meeting on the 29th. Markets still see a high probability of a hold, but with oil’s recent jump factored in, they assign roughly a mid-30% chance of a rate hike. Meanwhile, stock moves were dominated by individual names and sectors. Nvidia plunged 5% and Micron fell over 2%, weighing on the Nasdaq amid profit-taking after heavy AI capex spending and overheating concerns. Conversely, big tech names like Microsoft, Apple and Alphabet, along with credit card issuers and telecom stocks, held up the market floor.

On a global scale, Chinese memory-chip maker CXMT’s debut on the Shanghai exchange surged, underscoring intensifying semiconductor competition and adding to US chip-stock volatility. This week, a queue of key data—consumer confidence, inflation metrics—and Big Tech earnings from Microsoft, Meta, Apple and Amazon await. With AI investment and high rates both weighing on markets, Fed guidance and corporate results will be crucial barometers of the “AI rally’s” sustainability.