The Federal Reserve begins a two-day policy meeting Tuesday, with markets assigning an 80% to 85% probability to a 25-basis-point rate increase on Wednesday at 2 p.m. ET. August inflation data strengthened the case for tighter policy: the Consumer Price Index rose 3.4% annually, unchanged from July, while producer prices exceeded forecasts. Fed Chair Kevin Warsh is scheduled to hold a news conference at 2:30 p.m. ET, with investors focused on forward guidance (signals about future policy) as much as the immediate decision. August retail sales, due at 8:30 a.m. ET, could add to market volatility after nominal consumer spending fell 0.6% from June to July. Energy markets are also complicating the outlook after Brent crude briefly exceeded $108 a barrel when drone attacks by Iran-backed Houthi forces disabled a Saudi pipeline handling approximately 4 million barrels a day. Deteriorating security around the Strait of Hormuz and the cancellation of planned Gulf-Iranian diplomatic talks have raised supply concerns. Separately, AI-related equities declined across Asian and European markets after Anthropic CEO Dario Amodei urged developers to slow the pace of innovation, citing concerns about misuse of advanced systems. OpenAI CEO Sam Altman and xAI founder Elon Musk endorsed the position, while Deutsche Bank analysts said spending could shift toward AI safety and governance rather than fall overall. The week also includes Salesforce’s Dreamforce conference, Lennar’s quarterly results and Carnival’s earnings. The Dow Jones fell 1.6% last week, while the S&P 500 remained up about 12% year to date.