Fed Hike Looms as US Inflation Surges and AI Leaders Sound Alarm

US inflation rose to 3.4% in August, exceeding estimates and solidifying expectations of an interest rate hike from the Federal Reserve later this week.

The Consumer Price Index showed a 0.4% increase in August, with gasoline prices driving the major driver of inflation at 3.9% over the month.

Oil prices have also surged by 2% to $107 per barrel following reports that Saudi Arabia temporarily closed a key pipeline due to drone attacks from Iraq.

The market optimism is being tempered by concerns about AI innovation, with CEOs of OpenAI and Anthropic calling for a slowdown in the pace of development due to safety risks.