I'm LongbridgeAI, I can summarize articles.Federal Reserve Chair Kevin Warsh's hawkish remarks during a press conference caused sharp declines in AI and tech stocks, despite the Fed holding interest rates steady. Investors sold off shares of companies like Bloom Energy, SOXL ETF, and SanDisk as Warsh emphasized that inflation remains above target and rate cuts are not imminent. The market reaction reflected concerns over prolonged restrictive monetary policy and reduced forward guidance from the Fed.
The Federal Reserve didn’t raise interest rates Wednesday, holding them steady at 3.50%-3.75%.
Yet as markets absorbed Federal Reserve Chair Kevin Warsh’s hawkish message between 3 p.m. and 3:30 p.m. ET, some of Wall Street’s highest-flying AI stocks suffered sharp losses.
Warsh’s repeated insistence that “there’s only one [inflation] target and it’s 2%” and his refusal to treat one soft inflation report as a turning point reinforced the idea that restrictive monetary policy and rate hikes could be the new normal in the coming months.
The biggest casualties were concentrated across AI infrastructure, semiconductors, data centers and speculative technology.
According to Benzinga Pro Movers, here are the stocks that fell the most during the 30-minute window following Warsh’s remarks.
| Rank | Company | Price | Change between 3 p.m. and 3:30 p.m. ET |
|---|---|---|---|
| 1 | Bloom Energy Corporation (NYSE:BE) | $167.13 | -6.39% |
| 2 | Direxion Daily Semiconductor Bull 3X Shares ETF (NYSE:SOXL) | $100.48 | -6.37% |
| 3 | SanDisk Corporation (NASDAQ:SNDK) | $1.05K | -5.34% |
| 4 | Nebius Group N.V. (NASDAQ:NBIS) | $152.03 | -5.25% |
| 5 | IREN Limited (NASDAQ:IREN) | $30.26 | -4.93% |
| 6 | AST SpaceMobile Inc. (NASDAQ:ASTS) | $54.65 | -4.46% |
| 7 | Viasat Inc. (NASDAQ:VSAT) | $72.41 | -4.02% |
| 8 | Innio Inc. (NYSE:INIO) | $22.35 | -3.92% |
| 9 | CoreWeave Inc. (NASDAQ:CRWV) | $62.60 | -3.86% |
| 10 | SK Hynix Inc. (NASDAQ:SKHY) | $129.81 | -3.84% |
What Exactly Did Warsh Say to Spook the Markets?
The market’s reaction wasn’t triggered by the Fed’s decision to leave interest rates unchanged. It was triggered by Warsh’s insistence that the fight against inflation is far from over — and by his refusal to give investors any hint that rate cuts are on the horizon.
“There is no soft inflation target. There is no soft implicit target,” Warsh said.
Warsh reinforced that message by warning “the five-plus years of inflation above target cannot be cured in nine weeks or by a single month of modest price decreases,” making clear that one encouraging inflation report would not alter the Fed’s strategy.
Warsh repeatedly pointed out that the Fed didn’t raise rates over the past six weeks — but markets effectively did.
“Nominal and real yields are materially higher across the Treasury curve… some of the increases… are among the most significant in the last two decades.”
When asked about markets pricing a near-certain September hike, Warsh refused to validate those expectations, but added: “Markets can be a very good source of information.”
The implication is significant. Under Warsh, the Fed appears less interested in reassuring markets and more interested in observing how they price inflation, growth and monetary policy on their own.
That shift leaves investors with less guidance and more uncertainty.
This may be the biggest philosophical shift.
Powell tried to shape markets. Warsh wants to observe them. That means less reassurance when volatility rises.
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