Stocks Lower Ahead of Fed Decision

0:00Welcome to Risk Reversals Market Matrix. Your AI-generated podcast curated by Guy Adami and Dan Nathan breaking down the day's most impactful stock market and business headlines. I'm your host Brunson and all of today's market data is provided by FACSET. As a reminder, be sure to subscribe to Risk Reversals' daily markets newsletter. That's at riskreversal.substac.com. Now to the news. It's Tuesday, September 15th, and these are your top stories. Stocks were lower ahead of tomorrow's FOMC rate decision. The major themes from Monday remained rising oil and yields and questions about the future pace of AI spending, but some of yesterday's sharp rotations within tech normalized, at least for today. Let's begin with a roundup on the macro front. The benchmark 10 year US Treasury yield surged to levels not seen in nearly two decades. Driving borrowing costs higher across the broader economy. As CNBC reports,

1:02persistent inflation worries and heavy government debt issuance continue to push bond yields upward, creating fresh headwinds for equity markets and real estate. While recent leadership shifts brought a temporary reprieve to political battles over central bank independence, a potential return to monetary tightening threatens to disrupt the peace. As reported by the Wall Street Journal, any future interest rate increases by the Federal Reserve would severely test the delicate truce between the White House and monetary policy makers. Historical market cycle suggests central bank officials rarely surprise investors when interest rate adjustments are fully priced into futures contracts. Bloomberg notes that with Wall Street overwhelmingly positioned for monetary easing, the Federal Reserve is widely expected to align its upcoming policy decision with current market expectations. As reported by the Wall Street Journal, home builders and buyers are bracing for renewed pressure as long-term mortgage rates hover near 7 percent, further freezing and

2:04already sluggish residential real estate market. Analysts note that persistent affordability challenges and elevated borrowing costs continue to sideline prospective buyers while keeping existing homeowners locked into lower historical rates. Energy industry leaders are warning that persistent supply bottlenecks and refining capacity constraints have triggered a structural deficit in global fuel markets. According to reporting from the Wall Street Journal, executives expect elevated gasoline and diesel prices to linger, threatening higher transport costs, and renewed inflationary pressure worldwide. Next, the latest on AI safety, which has become one of this week's top stories. Leading artificial intelligence developers are forming rare cross industry partnerships to establish shared safety frameworks and technical standards for frontier models. As Bloomberg reports, open AI, Anthropic and Google are coordinating research efforts to address national security risks, model

3:06alignment, and guardrails against bad actors. Traders are now pricing a rate hike tomorrow as a given, and history shows that the Fed usually follows the market in those scenarios. Options are pricing in about 0.8 percent expected move for the SPX tomorrow. The rate decision is at 2 p.m. Eastern with the Worsh Press Conference, which could be market moving coming at 230 Eastern, and Dan Nathan will be sitting down with David Rosenberg of Rosenberg Research directly after that presser. You can watch or listen to that interview on Thursday morning. That's your risk reversal market matrix. Be sure to follow us to get alerts on new episodes every day. All of the articles mentioned on today's podcast can be found in the show description. For Guy Adamie and Dan Nathan's market analysis on these topics and more, watch Market Call on Risk Reversals YouTube channel, Monday through Thursday. Special thanks to our data provider FACSET for supporting our coverage. Story Curation by Risk Reversal, Skrepi.