Oil and Yields Pressure Stocks as the Fed Meets; Chip Shares Stabilize

U.S. stocks slipped Tuesday morning as another rise in oil and pressure in the bond market complicated the Federal Reserve’s two-day policy meeting. At 11:50 a.m. Eastern, the SPDR S&P 500 ETF was down 0.50%, the Nasdaq-100 ETF was off 0.55%, and the Russell 2000 ETF had fallen 1.17%. The United States Oil Fund rose 2.23%. The pattern was less a fresh technology panic than a broad repricing of inflation and financing risk.

The session followed a sharp Monday decline in semiconductor shares. On Tuesday, however, the group was mixed rather than uniformly lower: the VanEck Semiconductor ETF was up 0.17%, Advanced Micro Devices gained 2.04%, Intel added 1.14%, and Micron rose 0.35%. Sandisk remained down 0.95%. A one-morning rebound does not reverse Monday’s damage, but it does show that investors were no longer selling every part of the compute supply chain at the same rate.

The macro pressure came from two directions

Oil is the immediate problem. The U.S. Energy Information Administration’s September outlook raised its forecast for Brent crude to an average of about $90 a barrel in the second half of 2026, $8 above its prior forecast. The agency said constrained Middle East flows and low distillate inventories were keeping pressure on fuel markets. Higher energy costs can filter into transportation, manufacturing and household inflation even when the initial shock begins outside the U.S.

Inflation was already firm before this week’s move in oil. The Labor Department reported Friday that the consumer-price index rose 0.4% in August and 3.4% from a year earlier. Core prices, excluding food and energy, rose 0.3% for the month and 2.4% over 12 months. Those figures leave the Fed with an awkward combination: core inflation has moderated, but headline inflation and energy risk have not disappeared.

The Federal Open Market Committee began its meeting Tuesday and is scheduled to release its decision at 2 p.m. Wednesday, followed by a press conference at 2:30 p.m. The July minutes show that the committee held the federal-funds target at 3.50% to 3.75%, while three voting members preferred a quarter-point increase. That disagreement matters more than a market-implied probability: it is direct evidence that the debate inside the committee had already shifted toward whether policy was restrictive enough.

Chip shares stopped trading as one position

Monday’s selloff treated the semiconductor complex as a single crowded bet. Tuesday morning’s tape was more selective. AMD and Intel rebounded, Micron was little changed, and Sandisk stayed under pressure. Elsewhere in the AEA coverage universe, CrowdStrike rose 2.26% while Alphabet fell 1.75% and Nebius declined 1.19%.

That dispersion is useful information. It suggests the market was separating three questions that are often collapsed into one: how fast frontier-model development proceeds, how much infrastructure customers need, and which suppliers can convert spending into durable earnings. Those questions affect a memory producer, a CPU designer, a cloud operator and a security-software company differently.

There was no basis at midday for calling the semiconductor correction finished. The group remained volatile, oil was higher, small-caps were the weakest major segment, and the Fed decision was still a day away. The defensible conclusion was narrower: Tuesday’s market was trading macro risk broadly and AI risk selectively.