Nasdaq 100 futures drop 542 points as AI, oil pressure

Nasdaq 100 futures tumbled about 542 points, or 1.8%, in premarket trading Monday. S&P 500 contracts fell 0.7% and Dow futures slipped 0.2%.

Shares of AI-related chipmakers led the decline. Nvidia slid more than 2% before the opening bell, while Intel, Marvell and Micron each dropped roughly 4% to 5% after leading AI executives called for a slower pace of frontier-model development.

Investors reduced exposure to the most expensive hardware names while some enterprise software stocks rose. ServiceNow and Atlassian gained about 3.5%, and Workday and Adobe climbed nearly 3%.

Oil prices jumped after Saudi Arabia closed the East-West pipeline following a drone attack. Brent crude traded near $108 a barrel and U.S. crude near $103. The pipeline had been used to bypass the Strait of Hormuz. Gulf states also postponed talks with Iran on temporary shipping arrangements.

U.S. Treasury yields remained elevated, with the 10-year yield around 4.97% and the 30-year yield above 5.3%.

Markets have largely priced in a 25-basis-point rate increase at this week’s Federal Reserve meeting, implying about an 87% chance of a hike. Economists cautioned that a pause could unsettle bond investors, while a hike would reinforce the tightening path already reflected in prices.

“Investors are effectively pricing the safety debate as a possible delay to chip purchases and data-centre spending,” commented Sean Johnstone, a TMT sales strategist at Goldman Sachs. Patrick Munnelly, a strategist at Tickmill, warned, “The combination of an AI valuation reset and an oil-driven inflation shock has created a difficult backdrop across asset classes.”

Traders will watch the Fed’s policy statement, the updated economic projections and comments from central bank officials for signals on the future path of interest rates.