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S&P 500 futures were up 0.05%, while futures tied to the Dow Jones Industrial Average gained 21 points, or 0.04%. Nasdaq 100 futures advanced 0.03%.
In the regular trading day, the Dow declined 152 points, or 0.3%. The S&P 500 lost 0.5%, while the Nasdaq Composite slipped about 0.6%.
A sell-off in artificial intelligence-related names weighed down the stock market after Anthropic CEO Dario Amodei called for a slower pace on AI development. Over the weekend, OpenAI CEO Sam Altman also ruled out an initial public offering this year, pointing to growing worries around AI safety.
A slate of AI-connected stocks slid, with Nvidia dropping 3% and specialty glass and fiber optic play Corning tumbled 13%. The iShares AI Innovation and Tech Active ETF (BAI) dropped nearly 4%.
Higher Treasury yields also spooked investors. The 10-year Treasury yield briefly topped 5% on Monday for its highest level since October 2023. Oil prices also edged higher after Saudi Arabia shuttered a key pipeline that bypasses the Strait of Hormuz, leading Brent futures to close above $105 a barrel and West Texas Intermediate crude to settle over $101.
The Fed’s policy rate decision expected Wednesday is also weighing on traders’ minds. Fed funds futures trading suggest a roughly 92% likelihood that the central bank will lift rates by a quarter point from the current target rate range of 3.5% to 3.75%.
“We expect the Fed to, for the first time in the [Chairman Kevin] Warsh era, raise its policy rate to an upper bound of 4.0% at this week’s meeting,” Christopher Hodge, chief economist of the U.S. at Natixis CIB Americas.
“We also think that he will emphasize that this decision was discrete and does not pre-commit the Fed to any actions in subsequent meetings, giving him and the Committee maximum flexibility to respond to shocks,” he added.
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