Nasdaq-100 futures dropped 1.6% on Monday as a jump in oil prices and fresh calls from AI industry leaders to slow model development hit stocks from two directions at once. Nvidia sold off while crude and Treasury yields climbed on Middle East supply fears, and the Federal Reserve's rate decision looms Wednesday.
Nasdaq-100 futures fell 1.6% in early Monday trading, the steepest drop among the major U.S. index futures. Dow Jones Industrial Average futures fell 0.3%. S&P 500 futures slid 0.6%. The Invesco QQQ was down 1.7% ahead of the open. The SPDR S&P 500 ETF fell 0.7% over the same stretch.
Oil spike pushes yields higher
WTI crude futures advanced more than 3%, to around $103.45 a barrel, after Saudi Arabia closed a key pipeline that bypasses the Strait of Hormuz. Brent crude climbed further still, up 2.8% to $107.50 on the same supply fears. The 10-year Treasury yield also edged higher, to 4.98%.
AI slowdown warnings hit Nasdaq hardest
Nvidia stock sold off more than 2% premarket, threatening to extend its losing streak to five sessions as shares tested support near their 50-day moving average. Futures pointed to a 1.4% drop for the Nasdaq at Monday's open, AJ Bell investment director Russ Mould said, calling it a bad day for tech stocks.
The pressure traces back to Anthropic chief executive Dario Amodei's weekend blog post, which said it was time to slow the pace of improving advanced AI models. Tesla CEO Elon Musk backed the message on X: "Dario is right." OpenAI CEO Sam Altman pledged to use third-party evaluators.
Fed decision compounds the risk
The Federal Reserve's two-day policy meeting concludes Wednesday, with odds of a rate hike surging to 87% after last week's August consumer price data. Yet JPMorgan has urged investors not to chase the sell-off, arguing the wobble should prove short-lived. The bank noted the MSCI World index is up 11% even as yields climbed 80 basis points this year, and it expects a measured rate hike alongside robust earnings to help equities absorb the latest shock.
Sources: Investor's Business Daily, Proactive, The Guardian
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