The US stock market is experiencing a mixed day, with the Dow Jones Industrial Average (Dow) reaching a two-week low. Despite this, the broader market is being supported by the strength in technology stocks, particularly in the chipmaker and AI-infrastructure sectors.

According to a report by Bloomberg, Anthropic PBC, a leading artificial intelligence company, has seen its Q2 revenue grow by at least 14-fold from the same period last year. This stellar performance has bolstered the view that spending on artificial intelligence will be sustained, providing a bullish factor for the market.

However, the weakness in software stocks is weighing on the Dow Jones Industrial Average. Notable software companies such as Adobe Systems, ServiceNow, and Salesforce are down by more than 2%, limiting gains in the overall market.

The strength in chipmakers and AI-infrastructure stocks is a significant supportive factor for the broader market. The iShares Semiconductor ETF (SOXX) is up by more than 1%, with companies such as Sandisk, Western Digital, and Marvell Technology leading the gains. Micron Technology and Applied Materials are also up by more than 5%, while Seagate Technology Holdings Plc is up by more than 3%.

On the other hand, software stocks are under pressure, with Datadog leading the losers in the Nasdaq 100, down by more than 3%. Adobe Systems and ServiceNow are also down by more than 3%, while Salesforce and Workday are down by more than 2%.

The markets are discounting a 31% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16. Overseas stock markets are higher today, with the Euro Stoxx 50 up by +0.03% and China’s Shanghai Composite climbing to a 5-week high, closing up by +1.41%.

Interest rates are also being impacted by the stronger-than-expected US economic news on the Aug Empire manufacturing index and Aug NAHB housing market index. The 10-year T-note yield is up by +0.8 bp to 4.700%, while the 10-year breakeven inflation rate rose to a 3-week high of 2.296% today.

European government bond yields are moving higher today, with the 10-year German bund yield rising to a 3-week high of 3.214% and the 10-year UK gilt yield up by +0.1 bp to 5.038%. Markets are discounting a 92% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.