US Equity Futures Fall on Nvidia Price Hikes and Trade Tensions

US equity futures declined on Monday as concerns over the cost of artificial intelligence (AI) spending came into focus. Nvidia Corp announced price hikes for its AI chips, which will affect servers containing its flagship Vera Rubin and Grace Blackwell chips, with prices increasing by more than 15% in some cases. The price increases will take effect early next year.

Alibaba Group Holding Ltd launched a US$10 billion share sale to invest in full-stack AI capabilities, including expanding and enhancing its infrastructure. This move underscores the funding demands of companies investing heavily in AI technology, which may not be sustainable with soaring hardware costs threatening returns.

The Canadian dollar slipped as much as 0.5% in early trading due to the collapse of trade talks with the US, which saw Washington place a 50% duty on about US$20 billion worth of Canadian goods. In response, Canada will apply counter-tariffs on US$20 billion of US products on September 8.

Analysts noted that Nvidia's price hikes show cost pressures filtering through the supply chain, potentially putting pressure on margins across the tech sector and risking profitability and share prices.