US Stock Futures Edge Lower as Investors Assess Rates, Middle East Developments and Oil Prices: Dow Jones, S&P, Nasdaq, Wall Street

US stock futures moved slightly lower on Monday as investors assessed the outlook for Federal Reserve interest rates, developments in the Middle East and a decline in oil prices.

At 02:58 ET (06:58 GMT), Dow futures were down 33 points, or 0.1%, while S&P 500 futures declined 9 points, or 0.1%. Nasdaq 100 futures also fell 24 points, or 0.1%.

US equities finished the previous week higher following softer economic data and comments from Federal Reserve officials that increased market expectations that interest rates would remain unchanged at the central bank’s October meeting.

Expectations for a recovery in some Middle East oil exports and the release of emergency energy reserves by G7 countries have also contributed to lower crude prices.

Vital Knowledge analysts said: “However, none of this really alters the broader backdrop, which is still defined by upside energy price risks and elevated borrowing costs.”

Yemen Government Launches Offensive Against Houthis

Yemen’s internationally recognised, Saudi-backed government said over the weekend that it had launched a military offensive against Iran-backed Houthi forces, seeking to retake areas under their control.

Yemeni President Rashad al-Alimi said in a televised address that the operation would continue until “the country is liberated from the grip of the terrorist militia.”

Houthi forces control several populated areas of Yemen, including the capital Sanaa and territory in the northwest. Recent advances have also increased their influence around the Bab el-Mandeb Strait, a shipping route connecting the Red Sea and Gulf of Aden.

The developments have increased attention on potential disruption to Middle East energy flows, which have already been affected by restrictions on shipping through the Strait of Hormuz.

Media reports, however, indicate that some energy supplies continue to leave the region.

Iran Sets Conditions for Reopening Strait of Hormuz

Iran has said the Strait of Hormuz will remain restricted until seven conditions contained in an interim agreement reached with the United States in June are met.

Iran’s parliament speaker said on Sunday that the country’s position was “completely clear and firm,” adding that Washington “must understand that the period of dragging out the [diplomatic] process and dictating one-sided demands is over.”

At the United Nations General Assembly in September, Iran reportedly proposed reopening the Strait of Hormuz and restoring normal maritime traffic within seven days if its conditions were met.

The United States responded to the proposal through Qatari intermediaries last week, although details of the response have not been disclosed.

Qatar has acted as an intermediary between the United States and Iran during the conflict, which began with a joint US-Israeli attack on Iran in late February. Iran moved to restrict traffic through the Strait of Hormuz shortly afterwards. Before the conflict, approximately one-fifth of global oil and liquefied natural gas supplies passed through the waterway.

Oil Prices Decline as Exports Continue

Oil prices moved lower on Monday as markets considered signs of continued Middle East exports alongside the release of emergency reserves by G7 countries.

At 03:32 ET, Brent crude futures were down 0.8% at $101.50 a barrel, while US West Texas Intermediate futures fell 1.3% to $89.90.

Middle East oil exports exceeded pre-war levels on four of the seven days during the final week of September, according to shipping data cited by Reuters.

G7 countries agreed late last week to release 100 million barrels of diesel and crude oil from emergency reserves and refrain from imposing energy export restrictions.

OPEC+ also agreed on Sunday to maintain its November production targets. The group’s actual output remains below its quotas, according to an analyst cited by Reuters.

Altman Discusses AI Benefits and Risks

OpenAI Chief Executive Sam Altman said society should accept “some bad things happening” as part of obtaining the potential benefits of artificial intelligence.

Altman said he would not “take a trade of saying, We’ll make sure there’s no major hacks, there’s no misuse of this technology, there’s zero scams, there’s zero all the other bad things that will happen[.]'”

“Because I think people will do tremendously — orders of magnitude more — good stuff than bad stuff,” he said.

In comments to Politico, Altman said he supports a “lighter-touch regulatory stance” than rival AI company Anthropic.

He said there was “a lot of daylight” between the positions of OpenAI and Anthropic. Anthropic Chief Executive Dario Amodei has advocated tighter government oversight of artificial intelligence and has raised concerns about risks associated with the technology’s development.

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