US Stock Futures Fall on AI Development Concerns and Inflation Data; Oil Rises

U.S. stock index futures declined and oil prices rose as investors weighed fresh concerns over the pace of artificial intelligence development alongside higher-than-expected U.S. inflation data, which increased the likelihood of a Federal Reserve rate hike on Wednesday.

• Nasdaq 100 Index futures dropped 1.2%, following a 0.9% gain for the benchmark index last Friday.
• S&P 500 Index futures also declined during early Asian trading hours.

AI Industry Leaders Call for Slower Development

On Saturday, Anthropic CEO Dario Amodei announced that his company would introduce additional safeguards, including independent third-party evaluations, and urged the entire industry to slow the development of its most advanced models.

• OpenAI CEO Sam Altman supported the proposal.
• Elon Musk of xAI stated, "Dario is right."

Oil Prices Climb on Supply Disruptions

Brent crude oil rose 2.8% to $107.55 per barrel after Saudi Arabia shut down a key pipeline following drone attacks, and planned meetings between Iran and Gulf states were postponed.

Treasury Yields Rise

U.S. Treasury yields climbed on Friday, with:

• Two-year yields rising four basis points in New York.
• Ten-year yields approaching the critical 5% level.

Market Focus on Asian Tech Stocks

Monday's focus will center on Asian chip and technology stocks as investors assess whether weekend warnings translate into slower corporate spending. Rising U.S. inflation heightens the possibility of interest rates staying elevated for longer.

Nick Twidale, chief market analyst at AT Global Markets in Sydney, noted:

"The start of the week could be very interesting as investors evaluate how significant strategic shifts among some of the largest AI companies might impact valuations, with major Asian tech firms supplying these giants potentially bearing the brunt."

Inflation and Central Bank Decisions

U.S. inflation remains a more immediate test for markets, with data showing price growth faster than expected, reinforcing expectations for a Fed rate hike on Wednesday.

Three consecutive decisions by the Federal Reserve, the Bank of England, and the Bank of Japan could reshape global monetary policy prospects for 2026 and beyond. With oil prices once again clearly above $100 per barrel and war reigniting in the Middle East, policymakers see no near-term hope for easing global price pressures.

Trump Downplays AI Risks

Meanwhile, President Donald Trump downplayed growing concerns about AI risks, casting doubt on the commitment of industry leaders to slow the development of their most advanced and profitable models amid fierce competition from Chinese rivals.

This debate has intensified scrutiny over massive AI investments and whether returns can justify soaring infrastructure costs. High-valuation stocks remain vulnerable to signs of weakening returns or slowing spending, but some investors expect any pullback to be short-lived given robust demand for computing infrastructure.

Kerry Craig, global market strategist at J.P. Morgan Asset Management, said:

"This may be a sentiment-driven factor rather than one driven by valuations or earnings, unless the slowdown in development translates into cuts in capital expenditure or delays in model releases."

Source: Bloomberg