US stock futures slide as AI slowdown calls and Middle East escalation weigh

U.S. stock index futures dropped sharply on Sunday evening, with technology stocks under pressure as calls grew to slow the development of artificial intelligence.

Markets were also rattled by a jump in oil prices as Middle East tensions worsened, particularly after attacks by Yemen's Houthi group disrupted another key shipping route in the region.

By 19:06 ET (23:06 GMT), S&P 500 Futures were down 0.55% at 7,685.75 points. Nasdaq 100 Futures dropped 1.2% to 29,321.0 points, and Dow Jones Futures declined 0.28% to 52,856.0 points.

The decline followed a positive Friday session on Wall Street, when markets welcomed some pullback in oil prices as profit-taking set in after a strong run-up last week. But oil climbed back toward recent highs on Sunday evening.

Attention this week is firmly on a Federal Reserve meeting, with a growing number of participants expecting the central bank to lift interest rates by at least 25 basis points. Anxiety over rate hikes also weighed heavily on Wall Street, especially after upbeat producer and consumer inflation readings last week.

Altman, Musk back calls to slow AI development pace

Technology was poised to be Monday's weakest sector after prominent AI industry figures—chiefly OpenAI CEO Sam Altman and Tesla head Elon Musk—expressed support for slowing the pace of development.

Both supported Anthropic CEO Dario Amodei's call for such a move, after he proposed a sweeping plan to create more safety practices around AI development.

Separately, Clement Delangue, CEO of AI aggregator Hugging Face, and Google Deepmind Chair Demis Hassabis also supported Amodei's plan.

Amodei's call came after several high-profile hacks that were allegedly carried out by AI agents.

But any slowing in AI development would bode poorly for the stock market, given the trillions of dollars in valuation gains driven by AI over the past four years. Several Wall Street giants—specifically chipmakers and data center developers—are heavily exposed to AI.

Middle East escalation lifts oil, rattles Wall Street

Oil prices rose sharply on Sunday evening and early Monday after Yemen's Iran-aligned Houthis attacked more Saudi Arabian targets over the weekend.

The group also secured a major position along the Bab el-Mandeb strait—a development that signals renewed disruptions in shipping in the Red Sea.

The Houthis' actions could cut off another 4%-5% of global oil supplies, given that Bab el-Mandeb was also an alternative supply channel to the Strait of Hormuz.

The latter also remained shut amid more U.S.-Iran military action over the weekend. Separately, Oman said a meeting between Iran and Gulf powers to discuss reopening Hormuz—initially scheduled for Monday—was indefinitely delayed.

Oil prices surged after logging strong gains last week, keeping markets on edge over energy-fueled inflation and its effects on interest rates.