Dow, S&P 500, Nasdaq Futures Mixed Ahead Of Fed Rate Decision As AI Uncertainty Mounts: IOVA, PLAY, ELMT, RBLX Stocks In Focus

• Markets are pricing in a 92.4% chance of a rate hike by a quarter-percentage point in the upcoming meeting, according to data from the CME FedWatch tool.

• An industrywide split over the pace of artificial intelligence development weighed on AI stocks, dragging down markets.

• Long-term bond yields have also been climbing, even after the U.S. Department of the Treasury said last week it will triple its upcoming debt buyback plan to $6 billion.

U.S. stock futures were trading mixed in the overnight session late Monday as markets look ahead to the Federal Reserve’s September policy meeting, with an overwhelming majority expecting the central bank to hike interest rates.

Meanwhile, an industrywide split over the pace of artificial intelligence development weighed on AI stocks.

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Dow futures fell 0.11%, while the S&P 500 was flat and the Nasdaq-100 climbed 0.05% at 10:27 PM EDT.

On Monday, all three benchmark indexes closed lower amid ongoing AI pressures and rising oil prices. The Nasdaq Composite led the decline, shedding more than 146 points to close 0.56% lower. The Dow Jones Industrial Average and S&P 500 lost 0.29% and 0.48% at close, respectively.

Key US Market Drivers

At the start of the week, markets fell as concerns about AI’s growth spread across the industry.

Over the weekend, AI leaders were split over the technology’s rapid development, with Anthropic CEO Dario Amodei outlining a plan to slow the pace of development, and OpenAI CEO Sam Altman and SpaceX CEO Elon Musk also backing the suggestion that AI requires more oversight. However, Microsoft and Meta Platforms leaders opposed slowing down. Altman also said over the weekend that OpenAI would not go public this year amid AI safety concerns.

AI stocks, including leading chipmakers, declined on Monday. Nvidia Corp. (NVDA) lost more than 3% of its value at close, while Micron Technologies (MU) fell more than 5%. The iShares Semiconductor ETF (SOXX) also lost more than 5% at close.

However, software stocks climbed higher on the idea of slowed AI development, reversing recent AI-related disruptions. Salesforce Inc. (CRM) added more than 4% at close, while Palo Alto Networks Inc. (PANW) and CrowdStrike Holdings Inc. (CRWD) soared more than 13% each. The iShares Expanded Tech-Software Sector ETF (IGV) added about 5% at close on Monday.