March 16 - U.S. equity futures climbed in early trading on Monday as large-cap technology shares outperformed, led in the premarket by Meta, while elevated crude oil prices stemming from conflict in the Middle East kept many investors cautious.
Meta rose 3% in premarket trade after a report said the company is preparing to cut at least 20% of its workforce as it trims costs tied to substantial investments in artificial intelligence infrastructure and seeks gains in efficiency through AI-enabled labor. The move follows similar staffing changes announced earlier this year at Amazon.com and Block.
AI-related developments are expected to dominate attention across markets this week. Nvidia's annual developer conference was scheduled later in the day, and results from memory-chip maker Micron were also due. Separately, Taiwan’s Foxconn offered a strong quarterly revenue forecast that added to the technology sector's momentum.
"If Jensen can show Nvidia has the hardware to lead not just in building AI, but in powering its everyday use, this event could be a key moment in building confidence that Nvidia will remain the defining name in the next leg of the AI race," said Matt Britzman, senior equity analyst at Hargreaves Lansdown, who holds shares in the chip company.
Nvidia gained 1% in early trade, while Micron climbed 4% after brokerage RBC raised its price target. Tesla also ticked up 1% after CEO Elon Musk said the company's Terafab program to produce AI chips will launch in seven days.
Offsetting some of the market's upside, crude oil remained pinned at about $100 a barrel as shipments through the strategic Strait of Hormuz were largely halted. The disruption, tied to the broader conflict in the Middle East, and the lack of progress on a multinational coalition to secure passage left energy costs elevated and risk appetite muted among traders.
Policymakers are likely to spend the week weighing the economic consequences of sustained higher energy prices, a factor expected to feature prominently at central bank meetings around the world. The Federal Reserve also must account for tariff pressures and signs of a softer labor market when it concludes its two-day meeting on Wednesday. Markets are pricing in no change in rates at the meeting's end, and traders have postponed expectations for a 25 basis point rate cut until after October, a shift from July projections made last month according to LSEG-compiled data.
At 5:10 a.m. ET on Monday, Dow E-minis were up 88 points, or 0.19%, S&P 500 E-minis were up 27.25 points, or 0.41%, and Nasdaq 100 E-minis were up 124.25 points, or 0.51%.
Equities in the United States have experienced heightened volatility since the onset of the conflict as market participants assess its implications for growth, inflation and costs. Despite declines over the previous two weeks, U.S. stocks have generally held up better than many international peers, helped in part by a rebound in previously beaten-down technology names and by the country's status as a net oil exporter.
The CBOE volatility index fell 0.9 points to 26.31 on Monday. Futures tied to the rate-sensitive Russell 2000 index were marginally higher.
Economic releases slated for later in the day included February industrial production and the New York Fed's manufacturing index. Meanwhile, senior U.S. and Chinese economic officials were due to finish talks in Paris, with possible areas of agreement reportedly including agriculture, critical minerals and managed trade - topics that could be raised by U.S. and Chinese leaders in upcoming discussions in Beijing, according to sources familiar with the talks.
Currency markets also drew attention as the Japanese yen hovered close to 160 per dollar, a level not seen since the last central bank intervention.
Sectors displayed mixed performance on Monday. Energy stocks such as Occidental and ConocoPhillips climbed by more than 1% each, reflecting firm crude prices. Travel-related equities including Delta and Norwegian Cruise were broadly steady. Crypto-focused stocks also moved higher; Strategy advanced 2.7% as bitcoin rallied by more than 2%.
Key data points, corporate events and elevated energy costs set the tone for markets this week as investors weigh earnings, central bank decisions and the progress of geopolitical events influencing supply routes and commodity prices.