Stock futures experienced a decline on Monday, particularly in the semiconductor sector, following statements from AI leaders advocating for a deceleration in technological advancements. Concurrently, oil prices continued to rise, and Treasury yields remained close to their three-year peaks. Futures for the Nasdaq 100, S&P 500, and Dow Jones Industrial Average indicated declines of 1.5%, 0.6%, and 0.2%, respectively, in the latest trading session. On Friday, the three major U.S. stock indexes ended a four-session losing streak as oil prices experienced a pullback, although they ultimately closed lower for the week.
Stocks associated with AI experienced a decline in premarket trading on Monday following an essay by Anthropic CEO Dario Amodei, who asserted that “we must slow the pace at which we improve the capabilities of AI models.” The Roundhill Memory ETF and the broader iShares Semiconductor ETF experienced declines of approximately 6% and 5%, respectively, prior to the market opening. AI chipmaking giant Nvidia fell 3% premarket, and all of the other Magnificent Seven mega-cap tech stocks experienced declines as well. One bright spot was the software space, with the iShares Expanded Tech-Software Sector ETF 2% higher. Salesforce was up roughly 4%, helping to mitigate declines in the Dow, while cybersecurity stocks CrowdStrike Holdings and Palo Alto Networks experienced gains of 5.5% and 5%, respectively.
Elsewhere, Oracle announced that co-founder Larry Ellison cancelled his recently disclosed plan to sell up to 50 million shares. Its shares declined 3.5% amid the broader technology selloff. This week, market participants will be closely monitoring the Federal Open Market Committee’s interest-rate decision scheduled for Wednesday afternoon. Following the Consumer Price Index reading for August aligning with economists’ forecasts on Friday, traders currently perceive an 87% probability that the Federal Reserve will implement a rate increase this week, as indicated by the CME Group’s FedWatch tool. The 10-year Treasury yield, a key indicator for various interest rates such as mortgages, corporate bonds, and other loans, was recently observed at approximately 4.98%, showing minimal fluctuation from Friday’s closing level, which marked its peak since October 2023.
Oil prices experienced a significant increase following Saudi Arabia’s decision to shut down a crucial pipeline that circumvents the Strait of Hormuz, a move prompted by recent drone attacks. U.S. benchmark West Texas Intermediate prices increased by 2.5% to $102.55 a barrel, whereas Brent crude futures, the international benchmark, rose by 2.9% to $107.60. Bitcoin was trading around 77,700, up modestly over the past 24 hours. The U.S. dollar index, which monitors the value of the greenback against a selection of foreign currencies, increased by 0.4% to 99.53. Gold futures experienced a decline of 1.7%, settling at $4,330 per ounce.
