Markets are taking a double hit this morning as worries about the AI trade mount while oil prices continue to rise.
Tech stocks slid around the world, with Nasdaq-100 futures pointing down more than 1.5%. Leaders of three of the biggest AI companies over the weekend called for development of the technology to be slowed down, raising questions about whether demand for AI services and inputs like memory chips could come under pressure.
Meanwhile, Brent crude climbed above $108 a barrel as widening instability in the Middle East threatens oil supply. Saudi Arabia said Friday it shut down its East-West oil pipeline, a crucial route it has used to bypass the Strait of Hormuz, after facing multiple drone attacks. Hopes for diplomatic progress dimmed after a meeting between Gulf states and Iran planned for Monday was postponed.
This week’s focus will be the Federal Reserve policy decision on Wednesday, with investors expecting an interest-rate increase. The Bank of Japan is also expected to raise rates in the coming days. Rising inflation concerns have fueled a global bond selloff in recent weeks. On Monday, the U.S. 10-year Treasury yield was stable at around 4.97% after settling near a three-year high on Friday.
