US Stock Futures Plunge as AI Boom Falters Amid Rising Oil Prices
US stock futures plummeted on Monday as a global selloff in AI shares collided with rising oil prices ahead of this week's Federal Reserve decision. The Nasdaq 100 futures dropped about 542 points or 1.8%, while S&P 500 contracts lost 0.7% and Dow futures slipped 0.2%. The sharp decline is attributed to the growing concern that the AI capital-spending boom may slow down, led by calls from top executives including Anthropic's Dario Amodei, backed by Sam Altman and Elon Musk.
The selloff has produced an unusual rotation in the market, with investors opting for long enterprise software and short AI hardware. Companies like ServiceNow (NOW), Atlassian (TEAM), Adobe (ADBE), and Workday (WDAY) gained around 3% to 5% before the bell. On the other hand, Nvidia (NVDA) fell more than 2%, while Intel (INTC) and Marvell (MRVL) dropped roughly 4%-5%.
The rotation is due to slower frontier-model investment potentially hurting chip demand while giving software companies more time to monetize AI inside existing workflows. Analysts described this emerging trade as 'long enterprise software and short AI hardware.'
Brent crude traded near $108, adding pressure on expensive growth shares for Wall Street investors. The 10-year Treasury yield hovered just below 5%, keeping borrowing costs high across the economy.