AI Peak Controversy and Surge in Oil Prices: New York Stock Market Fluctuates Amid Fed's Guidance Reduction

On the 29th in New York local time (early morning on the 30th in Korea), the New York Stock Exchange closed lower as the Fed’s decision coincided with a surge in Middle East–driven oil prices and a correction in AI-related stocks. The S&P 500 fell 1.5%, the Dow plunged 2.2%, and the Nasdaq dropped 1.7%.

The Fed kept its benchmark interest rate at around 3.6% but internal divisions emerged as three members advocated for a rate hike. Markets focused less on the hold itself than on Fed Chair Waller’s message—“we won’t say what we will do next”—and repriced the possibility of an additional increase in September.

Immediately after the meeting, short-term yields edged down, but the 10-year Treasury yield jumped to 4.68%, reflecting medium- to long-term inflation concerns. At the same time, renewed conflict in Iran sent Brent crude up 7.3% to $88.09 per barrel, stoking fears of energy-driven reflation.

High interest rates and energy costs dealt a direct blow to highly valued AI beneficiaries. Semiconductor stocks like Nvidia, Micron, and AMD continued their pullback, and AI-related sell-offs spread to Asia, with SK Hynix in Korea falling 9.6%.

After the close, big-tech earnings from Microsoft and Meta were released. Microsoft beat expectations with $90 billion in revenue and earnings per share of $4.81, but said it would continue heavy capital expenditure focused on data centers and GPUs, highlighting the burden of AI investments.

Meta saw solid ad revenue but profit declined due to lawsuit and layoff expenses, and its stock traded lower in after-hours. For investors, today confirmed that while AI infrastructure investment is a driver of long-term growth, it is a double-edged sword that—combined with interest-rate, oil-price, and regulatory risks—increases short-term volatility.