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Stock futures are little changed as traders eye rising oil prices and rates

23 h ago

Stock futures hovered near flat Monday evening as traders focused on the Federal Reserve's policy decision later this week, while a sell-off in artificial intelligence stocks and rising Treasury yields and oil prices weighed on market sentiment. S&P 500 futures edged up 0.05%, Dow Jones Industrial Average futures gained 21 points (0.04%), and Nasdaq 100 futures advanced 0.03%. In regular trading, the Dow fell 152 points (0.3%), the S&P 500 lost 0.5%, and the Nasdaq Composite slipped about 0.6%. Asia-Pacific markets also declined early Tuesday, with Japan's Nikkei 225 down 0.25%, South Korea's Kospi falling 0.43%, and Australia's S&P/ASX 200 losing 0.46%. AI-related stocks dragged the market lower after Anthropic CEO Dario Amodei called for a slower pace of AI development and OpenAI CEO Sam Altman ruled out an IPO this year, citing growing safety concerns. Nvidia dropped 3%, Corning tumbled 13%, and the iShares AI Innovation and Tech Active ETF (BAI) fell nearly 4%. Higher Treasury yields added pressure, with the 10-year yield briefly topping 5%, its highest since October 2023. Oil prices rose after Saudi Arabia shut a key pipeline bypassing the Strait of Hormuz, pushing Brent crude above $105 a barrel and West Texas Intermediate over $101. Traders now await the Fed's rate decision Wednesday. Fed funds futures imply a 92% probability of a quarter-point rate hike to a target range upper bound of 4.0%. "We expect the Fed to raise its policy rate to 4.0% at this meeting," said Christopher Hodge, chief U.S. economist at Natixis CIB Americas, adding that Chairman Kevin Warsh will likely emphasize the decision is discrete and does not pre-commit future actions.