US stock futures fell on Monday as a global selloff in artificial-intelligence shares collided with another jump in oil prices ahead of this week’s Federal Reserve decision.
Nasdaq 100 futures dropped about, 542 points or 1.8%, S&P 500 contracts lost 0.7% and Dow futures slipped 0.2%.
Nvidia fell more than 2% before the bell, while Intel and Marvell dropped around 5% after leading AI executives called for a slower pace of development.
Brent crude traded near $108 after Saudi Arabia shut a key pipeline, while the 10-year Treasury yield hovered just below 5%, keeping pressure on expensive growth shares for Wall Street investors.
5 things to know before Wall Street opens
1. The AI trade has suddenly acquired a safety discount
Anthropic chief Dario Amodei’s call to slow frontier-model development, backed by Sam Altman and Elon Musk, has investors questioning whether the AI capital-spending boom can continue at the same speed.
Nvidia fell more than 2% premarket, while Intel, Micron and Marvell lost roughly 4%-5%.
Goldman Sachs TMT sales strategist Sean Johnstone told MarketWatch that investors were effectively pricing the safety debate as a possible delay to chip purchases and data-centre spending, even though no major company has formally announced cuts.
2. Software is becoming the other side of the AI trade
The selloff is producing an unusual rotation rather than a blanket technology retreat.
ServiceNow and Atlassian gained about 3.5% before the bell, while Workday and Adobe rose close to 3%.
Analysts described the emerging trade as long enterprise software and short AI hardware: slower frontier-model investment could hurt chip demand while giving software companies more time to monetise AI inside existing workflows.
3. Brent near $108 keeps the inflation shock alive
Oil is adding a second, unrelated source of pressure.
Brent traded around $108 and WTI near $103 after Saudi Arabia shut its East-West pipeline following a drone attack.
The route had become important as a way to bypass the Strait of Hormuz. Gulf states also postponed talks with Iran over temporary shipping arrangements.
Tickmill strategist Patrick Munnelly told MarketWatch that the combination of an AI valuation reset and an oil-driven inflation shock was creating an unusually difficult backdrop across asset classes.
4. The 10-year yield is still one step from 5%
The US 10-year Treasury yield eased slightly to about 4.97%, but remains close to the psychologically important 5% level.
Analysts noted that last week’s rise in yields helped drive the S&P 500 and Nasdaq lower, while the 30-year yield has moved above 5.3%.
Higher risk-free rates make richly valued technology stocks harder to justify and raise borrowing costs across the economy.
5. A Fed pause may now be the bigger surprise
Markets are pricing roughly an 87% chance of a 25-basis-point hike on Wednesday.
That creates an unusual asymmetry. A hike is largely expected, while a pause could unsettle bond investors by raising questions about the Fed’s inflation resolve.
Goldman Sachs economists believe policymakers will be wary of disappointing a market that has already priced tightening so aggressively.
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