Asian equities fell on Monday as concerns over the AI rally resurfaced following calls from major industry figures for a slowdown in technology development. The MSCI Asia Pacific Index dropped 0.6%, while South Korea’s Kospi declined 2.8%. SK Hynix and Samsung fell more than 3.5%, while SoftBank slumped as much as 13% after OpenAI CEO Sam Altman said the company does not plan to go public this year.

US equity futures also moved lower, with Nasdaq 100 futures falling 1.2% and S&P 500 futures declining 0.5%. European stocks were also set for a weaker open as pressure on technology shares spread across global markets.

Oil prices moved sharply higher, with Brent crude rising 2.5% to $107.30 a barrel after Saudi Arabia shut a key oil pipeline following drone attacks. The move added to concerns over the global energy supply as tensions around the Persian Gulf remained elevated.

Tensions were further compounded by the postponement of a planned meeting between Iran and Gulf states. Iran’s Foreign Ministry spokesperson said Saudi Arabia had insisted that the meeting between Tehran and Gulf powers in Oman should not take place, while Iran said the lack of US mediation remains the main obstacle to diplomacy.

Yemen’s Houthis also said they had attacked Saudi Arabia’s Khamis Mushait air base. Meanwhile, a planned meeting between Iran and several Gulf nations regarding the creation of a temporary shipping lane through the Strait of Hormuz was postponed, according to Oman’s foreign minister.

The Dollar strengthened while Treasuries remained under pressure following last week’s selloff, leaving the US 10-year Treasury yield near 5%. Hotter-than-expected US inflation reinforced expectations for tighter monetary policy, with swaps pricing nearly a 90% chance of a Federal Reserve rate hike later Wednesday.

Gold declined 0.4% to around $4,330 an ounce as higher yields and a stronger Dollar reduced demand for the non-yielding metal. A gauge of the Dollar gained 0.2%.

The outlook for artificial intelligence also remained under pressure. Anthropic PBC and OpenAI face competing forces from the technology industry, financial markets, and the Trump administration as they consider calls to slow AI development.

Oil remained a major focus as Saudi Arabia’s pipeline shutdown disrupted a route used to bypass the Strait of Hormuz during the US-Iran war, deepening the global energy crunch. US Energy Secretary Chris Wright also cautioned oil traders against expecting a breakthrough on the Strait of Hormuz as Iran considers proposing a passage agreement to other Gulf countries.

Elsewhere, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi held their first meeting on Indian soil in seven years, signaling efforts to further repair ties and manage an unpredictable Donald Trump.

Overall, global markets came under pressure as renewed concerns over AI development weighed on technology stocks, while rising oil prices and tensions around the Persian Gulf intensified concerns over energy supplies and monetary policy. Investors are also watching the Federal Reserve’s decision later Wednesday, with markets pricing a high probability of a rate hike following hotter-than-expected US inflation.

FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.

FISG — Interstellar Group