Good morning! A unanimous decision by the Federal Reserve to raise rates for the first time since 2023 whipsawed markets, which rose then fell during Chairman Kevin Warsh's press conference.

It was certainly a Q&A whose "A" stretched the definition of the word as the chair continued his reset of the Fed's communications.

Following the remarks, the S&P 500 (^GSPC) closed down 0.5% and the Dow (^DJI) 1.2%, as the Nasdaq (^IXIC) stayed flat. The 10-year Treasury yield (^TNX) closed above 5.0%.

Federal Reserve Chairman Kevin Warsh leaves after a press conference following a two-day meeting of the Federal Open Market Committee (FOMC) at the Federal Reserve in Washington, D.C., U.S., September 16, 2026. REUTERS/Evan Vucci

As widely expected, the Fed hiked interest rates by a quarter percentage point, the first hike since 2023. But there was still plenty of big news: Most FOMC members see more than one hike this year, and the vote Wednesday was unanimous.

No matter what the White House says, inflation is absolutely a concern. Driving those concerns more than anything else are the energy prices that stem from the war with Iran.

The big question is what happens next. More hikes, as per usual? According to the dot plot, yes. But the real answer is a big "not necessarily," as the playbook of years past may not hew to the uniqueness of the moment.

ING economist James Knightley estimated that, if oil starts flowing out of the Persian Gulf once again, "the situation would favor a 'one and done' outcome" at the central bank, with core inflation improving on the non-energy side of things.

At any rate, Warsh didn't tip his hand, even by his standards, in the press conference, which kept things to the "If I wanted you to understand, I would have explained it better" school of communication.

The dot plot was the only real forward guidance we got, and the curt description of the hike as a removal of a "dose of accommodation" was about the only detail despite 30 minutes of Q&A.

Nevertheless, markets still found something not to like about Warsh's remarks, viewing them as hawkish, and stocks lurched downward and flipped out of the green into the red.

The White House concurred, with a spokesperson calling it a "rather unfortunate decision."

Children's clothing company Carter's apparently has been delighted with AI productivity gains, according to Bloomberg. (REUTERS/Brendan McDermid)

Wall Street's big picture of earnings and outlooks, especially for AI, is almost certainly likely to drive the market over the long run. 

And while a handful of companies may be responsible for the big gains, we're seeing some signs that things may not be "winners-take-all."

First off, the fact that the SaaSpocalypse appears to be completely overstated can't be ignored. The corporate world may move fast, but why can't clever software companies with existing users keep their business if they keep up?

(We will note that the AI-first expense company we use now here at Yahoo Finance is an unreal upgrade on the previous software. I, Ethan, think I can do it in 15 seconds, giving me more time to read Wall Street notes and watch Roger Federer highlight reels.)

But even more importantly, at a broader level, Bloomberg Intelligence data noted that every single sector in the S&P 500 is poised to deliver earnings growth for Q3. The last time that happened, it was in 2021 and easy to show growth since COVID tanked everything. This time, it's doing it not with a bad comp but with an AI ace in the hole.

Though significant variation remains in sectors (duh), AI appears to have its robot fingers on the entire economy, either as a beneficiary of its capital spending or literally from the tech itself that can boost productivity and cut waste. 

Already, the third quarter's earnings season has its biggest theme to watch.

(Getty Images)

When market veteran Ed Yardeni talks, we always listen — especially if what he's saying is a little out of character as one of Wall Street's biggest bulls.

The bad news: He's slashing his year-end S&P 500 price target from 8,400 to 7,900.

The good news is that, obviously, this is still bullish if your definition is "this number is higher than where we are." This is just under a 4% gain through the end of the year.

But the rationale is notable: Yardeni thinks the bond yields are becoming just too high not to become a headwind. Not to gains, but to the kind of gains we would have had, as yields ultimately impact the biggest driver of stock prices: earnings and earnings expectations.

While some people on Wall Street see some downturn risks, Yardeni is still broadly positive and that former end-of-year target is now just a target for mid-2027 — and his end-of-decade S&P 10,000 (wow) remains in place.

7,900 represents the middle of the pack for Wall Street strategist shot calls, but we'll be watching the momentum of revisions. This is the second cut this week after Wells Fargo sliced off 250 points to put its projection at 7,700, just a hair above today's levels.

See what else is trending on Yahoo Finance.

Dario Amodei, Anthropic Co-Founder and CEO, and Marc Benioff, Salesforce CEO and Co-Founder, attend Dreamforce 2026 summit in San Francisco, California, U.S., September 15, 2026. (REUTERS/Carlos Barria)

It sounded so simple when the two powerful CEOs urged the AI industry to proceed with caution.

But already, the AI safety effort championed over the weekend by OpenAI's Sam Altman and Anthropic's Dario Amodei is being derailed by the realities of the real (corporate) world.

A report from the FT — Yahoo Finance Premium folks can read — noted that the companies' staff are struggling to figure out how to implement recommendations. The pink paper noted that employees don't seem to know what's going on, as there's been little guidance after the blindsiding promises.

Data protection issues, general security from having more outsiders invited to test models, and slowing the pace of proud researchers' work are causing tension.

Those internal challenges, plus differing approaches from Amodei and Altman — who already have a challenging relationship — and questions over the impartiality and teeth of third-party evaluators, are tripping up the AI safety moment's momentum.