Stock Market Update

Equity futures point to a lower opening this morning amid pronounced weakness in semiconductor stocks and another increase in crude oil prices. Stocks are coming off a losing holiday-shortened week, although strength across technology stocks on Friday helped the major averages snap a four-session losing streak and recover a portion of their earlier losses.

Chip stocks are facing particularly heavy pressure following weakness in overseas trading, as recent comments from several AI executives and developers calling for a slower pace of AI development on safety grounds have weighed on the group.

Oil prices are also moving higher, adding another headwind after last week's sharp advance. The latest increase follows the shutdown of Saudi Arabia's East-West pipeline, while a planned meeting between Gulf Cooperation Council members and Iran to discuss establishing a temporary shipping corridor through the Strait of Hormuz has been postponed.

There are no notable economic releases on this morning's calendar, leaving attention focused on Wednesday's FOMC decision. The CME FedWatch Tool currently assigns an 88.5% probability to a 25-basis-point rate hike.

In corporate news:

• Sam Altman told Fortune that an OpenAI IPO will not happen this year. 
• Anthropic to list on the NASDAQ, according to Business Insider. 
• Apollo (APO 128.19, -0.79, -0.6%) is looking to buy an orthopedics unit from Johnson & Johnson (JNJ 268.21, +2.63, +1.0%), according to Bloomberg.
• NVIDIA (NVDA 213.10, -5.19, -2.4%) is looking to invest in Anthropic, according to Reuters.

Reviewing overnight developments:

Equity indices began the week on a mostly lower note, with regional chip stocks under pressure amid concerns about slowing demand for memory products. Japan's Nikkei: -0.8%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: -0.1%, South Korea's Kospi: -3.3%, Australia's ASX All Ordinaries: UNCH.

In news:

• Japan's chief cabinet secretary said JGB issuance will be controlled through the initial and extra budgets.
• Major South Korean chipmakers rejected a proposal to make upfront payments for five years of power delivery.

In economic data:

• China's August New Loans CNY60.0 bln (expected CNY480.0 bln; last -CNY340.0 bln), August Outstanding Loan Growth 5.0% yr/yr (expected 5.1%; last 5.1%)
• Japan's July Industrial Production -0.2% m/m (expected 0.1%; last 1.9%) and Capacity Utilization 0.5% m/m (last 4.1%)
• Hong Kong's Q2 PPI 13.1% yr/yr (last 17.7%). Q2 Industrial Production 2.3% yr/yr (last 3.2%)
• New Zealand's August Performance of Services Index 51.2 (last 50.6). July Visitor Arrivals 0.5% m/m
• India's August WPI Inflation 9.92% yr/yr (expected 9.89%; last 9.78%) and August CPI 4.98% (expected 4.80%; last 4.44%)

Major European indices trade mostly lower, while the U.K. market outperforms with support from consumer and insurance shares. STOXX Europe 600: -0.2%, Germany's DAX: -0.3%, U.K.'s FTSE 100: +0.7%, France's CAC 40: -0.6%, Italy's FTSE MIB: -1.3%, Spain's IBEX 35: +1.2%.

In news:

• European Central Bank policymakers Kazaks, Kazimir, and Simkus left the door open to additional rate hikes.
• Insurers have shown relative strength amid upward pressure on bond yields.

In economic data:

• Swiss August PPI 0.7% m/m (expected 0.1%; last -0.1%); -0.7% yr/yr (last -2.1%)