Stock futures slip as markets weigh AI spending and Mideast attacks

U.S. stock futures edged lower on Monday as investors weighed the implications of rising capital spending on artificial intelligence and escalating conflict in the Middle East. Dow Jones Industrial Average futures fell about 0.2%, while S&P 500 and Nasdaq 100 futures each slipped roughly 0.3%, signaling a cautious start to the trading week.

The moves come as markets digest a surge in AI-related capital expenditure from major tech companies, which have announced billions in new spending on data centers and computing infrastructure. While the investments underscore long-term growth prospects for AI, some traders worry about near-term costs and returns. At the same time, a widening of attacks in the Middle East, including strikes on commercial shipping and military targets, has raised geopolitical risks that could disrupt energy supplies and global trade.

For investors, the combination of higher AI capex and Middle East tensions creates a complex backdrop. The AI spending boom has driven much of the stock market's gains this year, but any sign of diminishing returns could pressure tech-heavy indexes. Meanwhile, oil prices have risen on fears of supply disruptions, which could feed into inflation and influence Federal Reserve policy. The S&P 500 is coming off a weekly loss, and futures suggest the index could extend its decline.

On the data front, the source notes that no major economic reports are scheduled for Monday, leaving traders to focus on corporate news and geopolitical developments. The next key catalyst may be earnings from major tech firms later this week, which will be scrutinized for updates on AI spending plans and revenue trends.

Looking ahead, analysts expect market volatility to persist as the AI capex cycle matures and the Middle East situation evolves. The Fed's next policy decision in early November will also be a focal point, with traders pricing in a potential rate cut. For now, futures indicate a cautious tone as markets navigate these crosscurrents.