AI warnings knock Nasdaq futures, pressure tech stocks

Futures tracking the Nasdaq 100 index opened lower on Monday, led by a selloff in AI heavyweights following top U.S. executives warning about the need to slow AI development due to safety concerns. Nvidia shares dropped more than 2% in premarket trading, while Meta and Amazon fell over 1% each. Anthropic CEO Dario Amodei called for AI companies to slow model advancements, a sentiment echoed by Elon Musk and OpenAI CEO Sam Altman.

The declines reflect waning optimism after a frenzied AI development race, with billions of dollars poured into AI fueling surges in technology and semiconductor stocks over the past few years.

Chipmakers, including Intel, AMD, and Marvell Technology, saw significant declines, while U.S. software stocks, facing concerns of AI disruption, experienced a rise. ServiceNow, Adobe, and Workday climbed 3%, 2.5%, and 2.5%, respectively. Concerns about AI's potential harm intensified after Anthropic researcher Jacob Coxon resigned, citing fears that AI could pose an existential threat by the end of the decade.

However, some skeptics, like Michael Burry and Brian Jacobsen, questioned the credibility of the doomsday warnings, suggesting they might be a tactic to stifle smaller competitors. Economic strategist Brian Jacobsen called for a balanced approach, emphasizing the need to distinguish between justified caution and unfounded fear. Investors are increasingly wary of potential market impacts ahead of a possible interest rate hike this week, with the chance of a Federal Reserve rate increase at nearly 89%, according to the CME FedWatch tool.

Additionally, oil prices reached near-May levels, with Brent crude futures up 3.6% to $108.31 and U.S. West Texas intermediate crude futures up 3.3% to $103.35.