Oil Price Surge and AI Warnings Send Stocks Plummeting

U.S. stock futures declined Monday as concerns over elevated oil prices and AI safety risks weighed on investor sentiment.

The attacks on Saudi Arabia's East-West pipeline by drones launched from Iraq sparked fears of supply disruptions, causing Brent crude to rise 3.04% to $107.75 per barrel and WTI crude to gain 3.02% to $103.05 per barrel.

Meanwhile, top AI executives sounded the alarm on potential safety risks associated with rapid innovation in AI models. Dario Amodei, CEO of Anthropic, said that AI companies need to slow down, citing concerns over key model safety risks. Elon Musk backed Amodei's opinion, while OpenAI CEO Sam Altman announced that his company would not go public this year.

As a result, AI stocks such as Nvidia, Advanced Micro Devices, Micron, and Intel fell by 3%, 6%, 5%, and 6.4% respectively in pre-market trading. Major indices including the Dow Jones Industrial Average, S&P 500 Index, and Nasdaq 100 fell between 0.26% and 1.79%.

The Federal Reserve's upcoming policy meeting this week will be closely watched as markets price in a higher probability of a rate hike following last week's CPI and PPI reports.