US equities retreat as Brent crude hits 107 USD, Fed focus intensifies

US equities extended losses on Thursday, with market breadth weakening as Brent crude oil prices reached a 107 USD per barrel high since May, reigniting inflation fears and prompting tighter monetary policy expectations. The broader S&P 500 fell by 0.5 percent two hours before the close, while the Dow Jones Industrial Average declined 0.7 percent for its fourth straight session of weakness, and the Nasdaq 100 dropped 0.8 percent to 29,173 points. The pressure extended to technology stocks, particularly those in the semiconductor and AI sectors, which had previously shown relative resilience. The Nasdaq 100’s decline underscored broader concerns over rising interest rates and potential further hikes by the Federal Reserve, following the European Central Bank’s surprise 0.25 percentage-point rate increase. Analysts now focus on the Fed’s upcoming decision, with US inflation data due Friday—a release that could further influence expectations for tighter monetary policy. Producer price data released earlier in the week showed an acceleration in August, reinforcing inflationary pressures. AI-driven tech stocks, including Western Digital, ARM, Intel, Sandisk, and Micron, suffered losses of up to 5 percent, as competition from Chinese AI firms like DeepSeek intensified. Meanwhile, mining stocks also fell sharply, with Freeport-McMoran and Southern Copper each dropping around 7 percent, amid a broader correction in copper and silver prices. Concerns over delayed US tariff decisions and oil-driven economic uncertainty weighed on the sector. In retail, Macy’s declined 4.3 percent after its third-quarter outlook fell short of expectations, while American Eagle Outfitters suffered a 16 percent drop following disappointing sales figures. Cooper Companies, a contact lens manufacturer, saw a 14.5 percent plunge after its growth outlook was downgraded and a planned divestiture of CooperSurgical was canceled, prompting Bank of America to revise its buy recommendation. In contrast, AeroVironment’s stock rose nearly 10 percent after it reported quarterly earnings that exceeded market forecasts, highlighting mixed sector performance. The broader market’s weakness reflects broader geopolitical tensions in the Middle East, rising energy costs, and lingering concerns over the Federal Reserve’s monetary policy stance.