Futures are broadly lower into the cash open as an oil spike, a fast unwind in the AI trade, and rising Fed-hike odds squeeze risk appetite two days before the September FOMC decision.
ES sits near 7,618, off about half a percent from Friday's 7,656.98 close, while NQ futures are down roughly 1% and QQQ is off 1.45% to $704.48 in premarket. VIX has jumped over 10% into the high-17s, a real repricing of near-term event risk rather than a routine dip. Selling is concentrated in semis, optical, data-center and power names after Anthropic's Amodei and OpenAI's Altman called for a slower pace of AI development, with Musk backing the view even as the White House pushed back on ceding any lead to China. Brent has jumped toward $106-107 and WTI above $102 after a Saudi pipeline outage tied to Strait of Hormuz tensions, adding a fresh inflation impulse just as the Fed meets.
The FOMC meets Tuesday-Wednesday, with the rate decision and dot plot due Wednesday at 2pm ET. Fed funds futures now price roughly an 85% probability of a 25bp hike to 3.75%-4.00%, a sharp swing from near coin-flip odds a week ago after hotter CPI and PPI prints. That is not the cutting-cycle setup equities have priced for most of the year, and the SEP will matter as much as the vote count. Today's domestic docket is light, leaving the tape headline-driven into Wednesday's retail sales and FOMC combo.
The risk: oil keeps ripping and forces a hawkish surprise beyond 25bp, landing on top of an already de-grossing AI complex and turning an orderly pullback into a broader unwind. A Mideast de-escalation headline or a dovish dot plot could just as easily spark a violent squeeze back toward the highs.