US stock index futures traded modestly lower on Monday as markets considered the outlook for Federal Reserve monetary policy alongside developments in Yemen and Iran and lower crude oil prices.
At 02:58 ET (06:58 GMT), Dow futures were 33 points lower, representing a decline of 0.1%. S&P 500 futures fell 9 points, or 0.1%, while Nasdaq 100 futures were down 24 points, also 0.1%.
Wall Street ended the previous week higher after softer US economic figures and comments from Federal Reserve officials increased expectations that policymakers will leave interest rates unchanged at their October meeting.
Oil prices have also declined amid indications that some Middle East exports are continuing and following an agreement by G7 countries to release emergency energy reserves.
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 Conflict Adds to Regional Supply Uncertainty
Yemen’s internationally recognised government, which is backed by Saudi Arabia, announced over the weekend that it had begun a military offensive against Iran-backed Houthi forces.
The operation is intended to retake areas of Yemen controlled by the Houthis. President Rashad al-Alimi said in a televised address that the offensive would continue until “the country is liberated from the grip of the terrorist militia.”
The Houthis currently control several populated parts of Yemen, including the capital Sanaa and areas in the northwest. Recent advances have also increased their influence around the Bab el-Mandeb Strait, which connects the Red Sea with the Gulf of Aden and represents an important route for international shipping.
The situation has added to uncertainty surrounding Middle East energy flows at a time when traffic through the Strait of Hormuz has already been restricted.
Despite those disruptions, reports indicate that some oil supplies continue to leave the region.
Iran Says Conditions Must Be Met Before Hormuz Reopens
Iran has maintained that restrictions on the Strait of Hormuz will remain until seven conditions contained in an interim agreement with the United States are fulfilled.
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.”
Iran reportedly offered during September’s United Nations General Assembly to reopen the waterway and restore normal maritime traffic within seven days if its conditions were met.
The United States responded through Qatari intermediaries last week, although the details of Washington’s response remain unclear.
Qatar has been acting as an intermediary between the two countries during the conflict, which began with a joint US-Israeli attack on Iran in late February. Iran restricted traffic through the Strait of Hormuz shortly afterwards. Before the conflict, roughly one-fifth of global oil and liquefied natural gas supplies passed through the strait.
Brent and WTI Decline as Markets Assess Supply Flows
Crude oil prices moved lower on Monday as continued exports from the Middle East and the planned release of G7 emergency reserves provided some additional supply to the market.
At 03:32 ET, Brent crude futures declined 0.8% to $101.50 a barrel, while US West Texas Intermediate futures were down 1.3% at $89.90.
Middle East oil exports were above pre-war levels on four of the seven days in the final week of September, according to shipping figures cited by Reuters.
G7 countries agreed late last week to release 100 million barrels of crude oil and diesel from emergency reserves while refraining from imposing energy export restrictions.
OPEC+ separately agreed to maintain its existing production targets for November. Actual production by the group remains below its quotas, according to an analyst cited by Reuters.
Altman Outlines Position on AI Regulation and Risk
OpenAI Chief Executive Sam Altman said the potential benefits of artificial intelligence mean society should be prepared to accept “some bad things happening” as the technology develops.
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.
Speaking to Politico, Altman said he favours a “lighter-touch regulatory stance” compared with the position taken by Anthropic.
He also said there was “a lot of daylight” between OpenAI and Anthropic’s respective positions. Anthropic Chief Executive Dario Amodei has called for greater government oversight of artificial intelligence and has raised concerns about risks associated with the technology’s development.
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