# Rate hikes and AI safety fears shake Wall Street > The Fed's first rate increase in three years and a debate over AI development speed tested investors last week. - Title: Rate hikes and AI safety fears shake Wall Street · CNBC - Summary: The Fed's first rate increase in three years and a debate over AI development speed tested investors last week. Higher interest rates make stock picking… - Keywords: federal reserve, interest rates, stock market, ai safety, goldman sachs, wells fargo, bny, capital one, salesforce, boeing, fedex, micron - Source: CNBC — https://cnbc.com/2026/09/19/higher-interest-rates-and-ai-safety-fears-put-the-stock-market-to-the-test-last-week.html - Author: Alexa LoMonaco - Published: 2026-09-19T16:03:09+00:00 - Read time: 3 min - Topics: federal reserve, interest rates, stock market, ai safety, goldman sachs, wells fargo, bny, capital one, salesforce, boeing, fedex, micron ## Fed raises rates for first time in three years The Federal Reserve hiked its benchmark rate by a quarter point to 3.75% to 4% on Wednesday, its first increase since 2023. Fed Chair Kevin Warsh emphasized that inflation remains too high and the move supports returning to the 2% target. > inflation is too high and has been for too long ## Higher rates make stock picking tougher Rising interest rates slow economic activity by making borrowing more expensive and bonds more attractive to investors. This shift makes stock selection more critical as investors must work harder to find winners. ## Dow falls 1.7% in third straight losing week The Dow Jones fell 1.7% last week, marking its third consecutive week of losses. Banks were hit hardest, with Goldman Sachs dropping 8.5% and Wells Fargo, BNY, and Capital One also falling sharply. ## S&P 500 and Nasdaq show resilience The S&P 500 slipped just 0.08% while the Nasdaq gained 0.7% as investors returned to artificial intelligence stocks after an early-week sell-off. Salesforce took profits after gaining more than 50% quarter-to-date. ## Oil prices spike on Middle East tensions U.S. crude and Brent crude hit their highest levels since mid-May on Tuesday due to Middle East conflict concerns. The surge drove inflation worries and hurt oil-sensitive stocks like Boeing and FedEx. ## AI safety debate divides tech leaders Anthropic CEO Dario Amodei called for slowing frontier AI model development on September 12. OpenAI's Sam Altman and Elon Musk agreed, while Nvidia CEO Jensen Huang and others pushed back, arguing companies can self-regulate. > We should create products and properly test them ## AI stocks recover from safety concerns Chipmakers Intel and Micron fell over 5% Monday on fears slower AI development could cut data center spending. But the group recovered as investors grew less concerned the debate would meaningfully slow the AI buildout. ## Competition will drive AI spending forward Competition among AI companies and between the U.S. and China, combined with enormous financial incentives, should keep the AI buildout moving at pace. Investors added to Micron positions on Monday's sell-off. > proceed apace ## Cybersecurity benefits from AI risks More powerful AI agents create new security risks that companies will need to defend against, strengthening the case for increased security spending. CrowdStrike and Palo Alto Networks rose nearly 15% and 10%, respectively. ## Salesforce forecasts $63 billion revenue by 2030 Salesforce used its Dreamforce conference to argue AI is an opportunity, not a threat, to enterprise software. The company forecast fiscal 2030 revenue of more than $63 billion, topping analyst expectations of $59.2 billion. ## Salesforce unveils AIforce and Koa models Salesforce unveiled AIforce, a live interface across its ecosystem, and Koa, its first reasoning model developed with Nvidia. The company emphasized how AI helps clients maximize data use across marketing, service, commerce, and sales platforms. ## Salesforce stock undervalued at 15x earnings Salesforce trades at roughly 15 times forward earnings despite its AI opportunity and $60 billion in cumulative stock buybacks. The market is not giving the company enough credit for its shift toward AI-driven enterprise solutions. > way too cheap ## Key takeaway Higher interest rates make stock picking harder, but past cycles show defensive stocks hold up early while tech typically rebounds later.