What’s News in Markets: Markets Digest Shocks, Tokenized Stocks, Buffett Steps Down

Hey listeners, it's Saturday September 19th, I'm shrouded in ash for the Wall Street Journal, and this is what's news in markets. Our look at the biggest stock moves of the week, and the news that drove them. Let's get to it. Markets opened on shaky footing on Monday. Damage to Saudi Arabia's crucial East West pipeline stoked worries about oil shortages and inflation, sending oil prices and bond yields higher. Meanwhile, stocks skidded after the leaders of three of the biggest AI companies called for the technology's development to be slowed down. Then the Fed raised interest rates for the first time in three years. Here's Fed Chairman Kevin Warsh right after the vote. Is that inflation is too high and has been for too long? This fell and Treasury yields rose back above 5 percent, ending the day there for the first time in 19 years. By Friday's close, the 10-year Treasury yield is over 5 percent again and the 2-year yield ended the day at 4.74 percent. Its highest level since July 2024. Overall, the NASDAQ was up 0.7 percent this week, the S&P 500 edge lower by about 0.1 percent. And the Dow fell 1.7 percent. Brent crude ended the week down 0.7 percent to around 104 dollars a barrel. Concerns about AI safety led to a rare consensus between the leaders of the world's biggest AI companies who have been spending tens of billions of dollars to develop ever more powerful models. The CEOs of Anthropic, OpenAI, and SpaceX called for a slowdown in AI's development before their advances create a menace that can't be controlled. OpenAI's Sam Altman even suggested that his company may need to delay its much-anticipated IPO to focus on safety. Microsoft joined the course, saying it published a provisional code of conduct that it aims to apply when training new AI models. President Trump rejected calls for new AI regulation, calling it, quote, "a hoax and a sick conspiracy that would leave the industry in financial ruin and hand China a competitive edge." Shares and Microsoft ended the week 0.4 percent higher. Chip stocks rebounded, even as investors worried that slower AI progress could temper demand. Office of Nvidia ended the week up 0.5 percent. Marvel technology rose nearly 2 percent, and Intel stock jumped about 6 percent. A pair of developments in crypto this week. A top securities regulator cleared a path for trading venues to offer tokenized stocks in the U.S., a landmark decision that may overhaul traditional equity markets. The Securities and Exchange Commission said it would exempt authorized trading venues from certain rules that have prevented trading in digital tokens that mimic shares of listed companies. The SEC's decision comes just two days after a key piece of crypto legislation called the Clarity Act, failed to advance past a procedural vote in Congress, and is assigned the agency is willing to use its authority to create a path for some crypto and crypto adjacent offerings to enter mainstream financial markets. Tokenization, or trading regular assets on a blockchain, is gaining momentum. The New York Stock Exchange and NASDAQ are both building platforms for it right now. Qualified U.S. investors can already trade tokenized gold and private funds, so it looks like regular stock trading could be right around the corner. On Friday, Bitcoin broke above $80,000, lifting shares of crypto linked stocks. Shares and coinbase fell 0.7% and strategy added nearly 1%. And Friday closed a chapter in investing history, with legendary investor Warren Buffett stepping down as chairman of Berkshire Hathaway, the $1 trillion conglomerate that he's run for more than six decades. His son, Howard Buffett, who's been a Berkshire director since 1993, will assume the role of chairman effective immediately. Warren broke the news in a letter to investors on Friday, but he isn't walking away completely. He'll remain on the board as chairman emeritus. The company says Warren Buffett will "continue to offer his valued judgment and perspective." So, how did the market respond to Warren Buffett stepping down? Shares of Berkshire Hathaway rose 0.1% and ended the week down at 0.2%. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news and our live markets coverage on WSJ.com. Today's show was produced by Anthony Bansy, with supervising producer Melanie Roy. I'm Shara the Dinesh, have a great weekend and see you next Saturday.