Oil swept along on troubled waters

Key developments that could influence markets on Monday:

• Appearances by Fed Board Governor Christopher Waller, Fed Vice Chair for Supervision Michelle Bowman, ECB member Isabel Schnabel, Bank of England Executive Director Ruth Smith

The mere threat to shipping was enough to see Brent and U.S. crude rise almost 4%, nudge 10-year yields up 2 basis points and lift the dollar broadly. The Nikkei led Asian markets lower, and European share futures are down 0.6% or so.

Nasdaq futures lost 0.6% with investors increasingly focused on the looming earnings season and whether sky-high expectations for AI-related companies and chipmakers can be met. The major banks kick off from Tuesday, while Netflix NFLX.O and General Electric GE.N are also on the docket.

Analysts at BofA warned the AI capex boom was eroding cash generation with hyperscalers having spent $234 billion this year and forward free cash flow expected to turn negative for the first time since at least 2007.