[U.S. Market Recap] Sept 16: Dow Falls 631 Points After the Fed’s First Rate Hike in Three Years, Warsh’s Comments Rattle Wall Street

Hey everyone, Hirokichi here. U.S. stocks took a hit on September 16 after the Federal Reserve raised interest rates for the first time in three years, sending the Dow Jones Industrial Average down 631 points. Stocks had actually been climbing before the decision, which made the afternoon reversal feel even sharper than the headline number suggests. Let’s walk through how the indexes moved, what drove the market, and which stocks got the most attention.

How the Dow, S&P 500, and Nasdaq Moved

As the table shows, the Nasdaq basically held its ground while the Dow took the biggest hit, dropping more than 1%. The two indexes told very different stories on the same day.

The session actually opened higher, with investors partly pricing in the widely expected rate hike. Early on (around 9:32 a.m. ET), the S&P 500 was up 0.25% and the Nasdaq was up 0.44%, suggesting the market cared less about the hike itself and more about what would come after it. Then, at 2 p.m. ET, the Fed announced a quarter-point rate increase, with its outlook pointing to one more hike later in 2026 before holding steady through 2027.

The real turning point came during the press conference from Fed Chair Kevin Warsh, who replaced former Chair Jerome Powell. Warsh said rising long-term Treasury yields reflect three factors: a resilient economy, surging capital spending demand, and geopolitical risk. But his emphasis on persistent inflation risk led investors to conclude that this hike might not be the last one. By the end of his remarks, the Dow’s decline had widened to around -1.07%, and it kept sliding into the close to finish down 1.21%. The Nasdaq was the exception — some bargain-hunting in tech names helped it claw back to a flat -0.01% by the close.

What Moved the Market: The Fed’s First Hike in Three Years and Rising Yields

Wednesday’s rate hike wasn’t a surprise — futures markets had priced in more than a 90% probability going into the meeting. The real question was whether this would be a one-and-done move or the start of a series of hikes, and Warsh’s comments did little to settle investors’ nerves.

As a result, the 10-year Treasury yield reportedly climbed to around 4.99%, its highest level since 2007 (based on market data from Nikkei and other sources). Rising long-term yields tend to weigh on stocks — especially growth stocks that are valued on future earnings — which added to the pressure on sentiment.

For context, the Dow closed at 52,093.11 and the Nasdaq closed at 25,981.57 the previous day, September 15 (see our recap of the September 15 session for more). Comparing the two days makes the size of this decline a bit clearer.
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Stocks in the Spotlight

As you can see, each stock had its own story — earnings, regulation, partnership news. Let’s look at them one at a time.

Nvidia (NVDA): Bought back on “no new AI law needed” comments

Chipmaker Nvidia was bought back on this day, helped by comments from CEO Jensen Huang, who dismissed the need for new AI regulation, saying essentially that “no new law is needed.” That eased some of the anxiety that had been building around potential AI development restrictions in recent days. I should be upfront that I wasn’t able to confirm Nvidia’s exact closing percentage change, so I’m leaving that out rather than guessing. Semiconductor stocks have been jumpy lately on AI slowdown concerns, and this is a good example of how a single comment from a CEO can shift sentiment.

Intel (INTC): Jumped on reported SK Hynix memory partnership

Intel rallied after Reuters reported the company was in talks with South Korea’s SK Hynix (SKHY) about a partnership to produce memory chips in the U.S. Shares were up 3.84% in premarket trading and had climbed to +4.34% by around 1:45 p.m. ET during the session. One scenario under discussion would have SK Hynix lease part of Intel’s Ohio manufacturing facility to help build out memory supply for AI and data center demand. The news lines up with the Trump administration’s push for more domestic chip production, though South Korean government opposition over sensitive technology remains a possible hurdle — nothing has been finalized yet.

J.B. Hunt Transport (JBHT): Tumbled on a profit warning

One of the day’s biggest decliners was trucking company J.B. Hunt Transport Services, which fell more than 12% intraday (it was down 12.10% in premarket trading) after warning of declining earnings and highlighting rising labor and fuel costs. With rate competition still intense across the trucking industry, the company’s inability to pass rising costs on to customers left investors worried about shrinking profitability. The size of the reaction stood out given how resilient the sector had looked recently.

Diamondback Energy (FANG): Fell over 8% despite higher oil prices

This is the move that personally left me scratching my head the most. While fellow energy name Marathon Petroleum (MPC) rose on the back of higher crude prices, Diamondback Energy fell more than 8% intraday. There’s no single confirmed reason, but a combination of factors likely played a role: renewed inflation concerns and rising long-term yields putting pressure on valuations for capital-intensive shale producers, plus lingering uncertainty from the ongoing conflict involving Iran. It’s a good reminder that “oil prices up” doesn’t automatically mean “energy stocks up.”

Meta Platforms (META): Higher on new AI subscription news

Meta Platforms rose after unveiling a new AI subscription service called “Meta ONE.” With massive AI spending continuing across the industry, how companies plan to monetize that investment is a major question for investors, and a clear subscription-based revenue model appears to have been well received.

Sector and ETF Moves

By sector, energy stocks rose on higher oil prices, while consumer services and retail names declined. As J.B. Hunt’s slide illustrates, it was a tough day for industries that can’t easily pass rising costs on to customers.

Popular ETFs among Japanese investors, such as VOO (Vanguard S&P 500 ETF) and QQQ (tracking the Nasdaq 100), likely moved in the same direction as the S&P 500 and Nasdaq, though I wasn’t able to confirm their exact closing changes, so please treat that as a rough guide only. High-dividend ETFs like SPYD, HDV, and VYM also tend to move more sluggishly when yields are rising, which is worth keeping in mind.

What to Watch in Japanese Stocks Today

Given the decline on Wall Street, Japanese stocks look likely to face headwinds today. Here are three things I’m personally watching:

(1) The Bank of Japan’s policy meeting on September 18. With both the Fed and BOJ in focus, currency moves (the yen) could have an outsized effect on export-related stocks.

(2) How the market digests the Fed’s forecast of one more rate hike later this year. There are two competing interpretations here — one that a hike signals confidence in the economy, and another that it means tighter policy for longer — so choppy price action seems likely for a while.

(3) The ongoing conflict involving Iran and its effect on oil prices. If elevated oil prices persist, it could add further fuel to inflation concerns.

On the currency front, the dollar-yen pair traded in a range of roughly 154.60 to 155.50 yen, but I wasn’t able to confirm the exact closing level after the Fed decision, so I’m noting that gap here rather than guessing at a number.

Let’s keep at it, slow and steady. Have a good day!

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* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

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