By Purvi Agarwal and Twesha Dikshit
Feb 17 (Reuters) – U.S. stock futures pointed to a lower open on Tuesday after the long weekend as worries about AI-triggered disruptions rattled market confidence and investors focused on developments in nuclear talks between the United States and Iran.
Concerns over artificial intelligence impacting business models sparked a selloff in software firms, brokerages and trucking companies the previous week, causing Wall Street’s three main indexes to log their steepest weekly decline since mid-November.
Potential risks from Chinese AI players also added to the uncertainty. On Monday, Alibaba unveiled a new AI model, Qwen 3.5, designed to independently execute complex tasks.
Most U.S. tech stocks were lower on the day, with Nvidia losing 1.1% and Microsoft down 0.7%.
“The Alibaba AI product is one of the variables weighing on markets today and that’s a part of a much larger dynamic that’s at play here,” said Stash Graham, managing director and CIO at Graham Capital Wealth Management.
“You are seeing a rebalance… for the markets to take a breather off such a strong year last year; it’s natural.”
Iran’s supreme leader said U.S. attempts to depose his government would fail, as the two nations started indirect talks in Geneva over a long-running nuclear dispute.
At 08:36 a.m. ET, Dow E-minis shed 95 points, or 0.19%, S&P 500 E-minis were down 29 points, or 0.42%, and Nasdaq 100 E-minis fell 212.75 points, or 0.86%.
This week, the personal consumption expenditure report – the U.S. Federal Reserve’s preferred inflation gauge – will be closely watched for insight into inflation and could impact the central bank’s rate-cut trajectory.
The dataset follows a cooler-than-expected consumer inflation reading last week that slightly raised bets on interest-rate cuts this year.
Traders are pricing in a 25-basis-point reduction in June, with the odds at 52%, compared with a close-to-49% chance a week ago, according to CME’s FedWatch Tool.
Corporate earnings are in the final lap of the earnings season. Of the over 73% of S&P 500 companies that have reported earnings this quarter, 74.5% posted results above analysts’ estimates compared to 67% in a typical quarter, LSEG data on Friday showed.
Markets await comments from Fed Governor Michael Barr and San Francisco President Mary Daly later in the day.
Warner Bros rejected Paramount’s revised takeover bid, giving the studio a week to negotiate a better deal. The companies rose 2.3% and 3.8%, respectively.
In other movers, Norwegian Cruise Line jumped 6% in premarket trading after the Wall Street Journal reported activist investor Elliott has built a more than 10% stake in the cruise operator.
U.S.-listed shares of Zim Integrated Shipping soared about 35% after Germany’s Hapag-LLoyd agreed to buy the company for $4.2 billion.
Fiserv’s shares gained almost 3.6% after WSJ reported activist investor Jana Partners has taken a stake in the payments company.
Masimo surged about 35% after Danaher said it would acquire the pulse-oximeter maker for $9.9 billion, including debt. Danaher lost 6%.
On Friday, investors will track the U.S. Supreme Court’s next opinion day, when a verdict on President Donald Trump’s trade tariffs could be announced.
(Reporting by Purvi Agarwal and Twesha Dikshit in Bengaluru; Editing by Pooja Desai)
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