U.S. stock futures drop

S&P 500 Futures dropped 0.2% to 40,459.75 points, Nasdaq 100 Futures declined 0.35% to 30,457.75 points, while Dow Jones Futures slipped 0.3% to 51,002.0 points

U.S. stock index futures dropped on Monday evening as reports of a halt in peace talks with Iran sparked caution over a prolonged war and high energy prices.

A recent rally in technology shares, amid hype over artificial intelligence, also appeared to be cooling, with U.S. stock market open to profit taking after hitting a series of record highs.

S&P 500 Futures dropped 0.2% to 40,459.75 points by 23:37 GMT. Nasdaq 100 Futures declined 0.35% to 30,457.75 points, while Dow Jones Futures slipped 0.3% to 51,002.0 points.

Iranian media reported earlier on Monday that Tehran had halted indirect negotiations with the U.S., and was now moving to completely block the Strait of Hormuz.

Reports of a breakdown in Iran-U.S. talks come after both sides traded air strikes for the second time in a week on Monday, further testing an already tenuous ceasefire.

This saw market expectations for a comprehensive peace deal largely fade, sending oil prices higher and keeping investors on edge over the economic fallout of a prolonged war.

U.S. stock indexes hit record highs on Monday, aided chiefly by gains in tech shares with exposure to AI.

The S&P 500 gained 0.3% to 7,600.02 points, while the NASDAQ Composite rose 0.4% to 27,086.81 points. The Dow Jones Industrial Average added 0.1% to 51,078.94 points.

Chipmakers were a major driver of gains, with the Philadelphia Semiconductor Index up 1.1% and remaining close to record highs. Market darling NVIDIA Corporation soared 6.3% after it unveiled a host of new AI chips, including a new line for Microsoft Corporation Windows computers.

But momentum in the chipmaking sector appeared to be slowing after a stellar run through May, with the sector also appearing vulnerable to profit-taking.

Broader tech shares, beyond chipmaking, also mostly pulled back, with companies including Tesla Inc, Amazon.com Inc, Apple Inc, and Alphabet Inc down between 1% and 5%.