Wall Street's main indexes closed lower Monday after a sell-off in artificial intelligence stocks, while Treasury yields and oil prices climbed. Futures steadied Monday evening ahead of the Federal Reserve's rate decision due Wednesday.
U.S. stock futures held nearly flat Monday evening, with S&P 500 futures up 0.05% and Dow futures gaining 21 points, or 0.04%. Nasdaq 100 futures advanced 0.03%.
Indices close lower after AI sell-off
The regular session told a different story. The Dow declined 152 points, or 0.3%. The S&P 500 lost 0.5%. The Nasdaq Composite slipped about 0.6%.
A sell-off in artificial intelligence names drove the decline 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.
Nvidia dropped 3%, and specialty glass and fiber optic maker Corning tumbled 13%. The iShares AI Innovation and Tech Active ETF (BAI) dropped nearly 4%.
Yields and oil prices add pressure
Higher Treasury yields also spooked investors. The 10-year Treasury yield briefly topped 5% on Monday, its highest level since October 2023.
Oil prices edged higher after Saudi Arabia shuttered a key pipeline that bypasses the Strait of Hormuz. Brent futures closed above $105 a barrel. West Texas Intermediate crude settled over $101.
Fed rate decision looms
The Fed's policy rate decision, expected Wednesday, is also weighing on traders' minds. Fed funds futures trading suggests a roughly 92% likelihood that the central bank will lift rates by a quarter point from the current target range of 3.5% to 3.75%.
According to Christopher Hodge, chief economist of the U.S. at Natixis CIB Americas: "raise its policy rate to an upper bound of 4.0% at this week's meeting". He added that the decision would be discrete and would not pre-commit the committee to further action.
Source: CNBC
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