Why are AI-linked stocks under pressure?
Earnings season is surfacing real doubt about AI capital-spending growth, and that is weighing on the S&P 500's AI-linked names even as the broader tape holds up. Investors are parsing capex guidance line by line, looking for the first hard evidence that hyperscaler spending is actually slowing rather than just decelerating in growth rate.
What are Treasury yields doing?
The 10-year yield climbed to 4.67% (+0.258%) and the 20-year rose to 5.231% (+0.287%), a curve move consistent with the market pricing less near-term easing, not more. Higher long-end yields alongside hike-leaning Fed odds is the textbook pairing, and it is showing up here.
What are Fed odds pricing for September?
CME FedWatch has consistently priced elevated odds of a 25 basis point hike at the September 16 meeting, moving the federal funds rate from the current 3.50%-3.75% range toward 3.75%-4.00%. That is the opposite of a cutting cycle, and it is the framing that matters for anyone still trading this on rate-cut assumptions.
What is left on the calendar before the decision?
July CPI prints Wednesday, August 12, the next hard inflation read before the Fed meets. Minutes from the July 29 meeting, where three governors already dissented in favor of a hike, are due around August 19. Both land before the September 15-16 decision, and both can move the odds meaningfully in either direction. The Fed's inflation target is 2% core PCE; watch whether incoming data pulls toward or away from that line.
Strong hike-odds pricing and a still-unresolved AI-spending story are pulling markets in different directions at once. Neither wins until CPI, the minutes, or next quarter's capex guidance actually breaks the tie.
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