Nasdaq futures fall over 1.5% as oil climbs; AI stocks decline amid safety debate

The latest market report highlights that US stock futures declined more than 1.5 percent on Monday afternoon, pointing to a soft opening for equities, as crude prices surged on supply concerns in West Asia. In the meantime, market participants braced for possible interest rate hikes in the United States and Japan the current week.

AI-linked shares additionally came under pressure after the leaders of OpenAI and Anthropic called for a slowdown in AI development to manage risks.

At 1:30 pm IST, S&P 500 futures were down 0.67 percent, while Nasdaq futures declined 1.52 percent. Dow Jones Industrial Average futures declined 0.22 percent.

On the oil front, Brent crude advanced nearly 3 percent after fresh strikes on Saudi Arabia and ships in the Gulf. An attack on a Saudi oil pipeline and an advance by Yemen's Houthis boosted concerns over further disruption to global energy supplies.

Brent futures advanced nearly 9 percent last week. US crude rose 2.6 percent to USD 102.62 a barrel.

A meeting in Oman between Iran and Gulf Arab states, scheduled for Monday to discuss a deal on opening the Strait of Hormuz, was postponed.

The US consumer price report on Friday additionally led markets to price in an 86 percent chance that the The US central bank will raise interest rates by 25 basis points on Wednesday and move again by December. It would be the first hike since mid-2023.

Japan's Nikkei declined 1 percent, while South Korea's benchmark eased 3.2 percent amid concerns over a slowdown in AI development.

Indian markets remained closed on Monday on the occasion of Ganesh Chaturthi.