Oil breaks $108. Nasdaq futures slide.

Friday's relief is already under pressure.

Wall Street rallied after August inflation landed close to expectations and oil retreated. The S&P 500, Dow and Nasdaq each gained about 1%. Then the weekend changed the setup.

Saudi Arabia shut its East-West oil pipeline after a drone attack. Brent rose 3.3% to $108.04, WTI climbed 3.5% to $103.54 and the 10-year Treasury yield held near 4.97%. S&P 500 futures fell roughly 0.6%, while Nasdaq-100 futures dropped more than 1% as the AI selloff spread into U.S. premarket trading.

The Fed meets Tuesday and Wednesday. It can control one interest rate. It cannot reopen an oil pipeline.

Saudi Arabia's East-West pipeline is designed to move crude from the kingdom's eastern fields to the Red Sea, bypassing the Strait of Hormuz. Its shutdown removes an important pressure valve just as attacks around the Bab el-Mandeb add risk at the Red Sea's southern entrance.

Brent rose 3.3% to $108.04 Monday morning. The supply concern is becoming more immediate: industry sources told Reuters that inventories at the pipeline's Red Sea terminal in Yanbu may cover only five to seven days of exports. A planned Monday meeting between Iran and Gulf countries was also postponed, removing a potential path toward near-term de-escalation.

This creates a poor trade-off for the Fed. August CPI rose 0.4% for the month and 3.4% from a year earlier. Core CPI rose 0.3% monthly and 2.4% annually. Those figures were close enough to forecasts for stocks to rally Friday, but gasoline was already up 27.4% from a year ago before Monday's oil move.

A rate increase can reinforce the Fed's inflation credibility. It cannot produce more crude. If oil stays above $100 while policy tightens, the economy absorbs both a higher energy bill and a higher cost of money.

The S&P 500 closed at 7,656.98, the Dow at 52,573.29, the Nasdaq at 26,333.04 and the Russell 2000 at 2,903.94. SPY finished at $764.29 on 45.5 million shares, while QQQ closed at $714.88 on 26.7 million shares.

The rebound was broad but did not repair the week. The S&P lost 0.8%, the Dow fell 1.6%, the Nasdaq slipped 0.7% and the Russell dropped 2.4% across the five sessions.

The tell: oil fell nearly 3% Friday and stocks rallied. Oil rose more than 3% Monday and futures weakened. Energy remains the market's fastest macro transmission mechanism.

Traditional rate markets now place the probability of a 25-basis-point increase on Wednesday at close to 90%. Polymarket prices the same outcome at 79%, with the hold outcome at 21%. Both markets favor a hike, but conventional futures traders are showing greater conviction.

The gap matters, but it is not a clean arbitrage signal. The markets use different structures, participants and update cycles. Treat them as two sentiment gauges, not interchangeable prices.

Higher oil raises inflation risk while weaker futures signal growth concern. If the 10-year yield rises with crude, the market is leaning toward inflation. If yields fall while crude rises, recession fear is doing more of the work.

Watch the repricing: Wednesday's statement lands at 2:00 PM ET, followed by Chair Kevin Warsh at 2:30 PM ET.

Anthropic CEO Dario Amodei called for slowing AI development to address safety risks. OpenAI CEO Sam Altman backed the case for caution and said his company would not pursue an IPO this year while it focuses on safety.

Asia priced the comments as a demand and valuation risk. SoftBank fell 10.7%, SK Hynix lost 6.4%, Samsung Electronics dropped 4.1% and Kioxia slid 6.4%. The pressure then spread into U.S. premarket trading, with Nvidia and TSMC lower and Nasdaq-100 futures down more than 1%.

The reaction comes one session after Oracle's capital-spending plan lit up the AI hardware trade. Dell gained about 12.0% Friday and HPE rose 12.4%. The market now has to price two opposing forces: enormous infrastructure demand and a possible political push to slow deployment.

Contracted backlog and current revenue matter more if distant growth becomes less certain. Hardware suppliers with signed orders can hold up better than companies priced mainly on future adoption.

MONDAY, PLAY: Dave & Buster's reports after the close, with consensus looking for roughly $0.18 in EPS. Watch comparable sales, traffic and the balance sheet.

TUESDAY, TCOM: Trip.com reports after the close. Consensus expects roughly $5.94 in EPS.

WEDNESDAY, LEN: Lennar reports after the Fed decision. Analysts expect roughly $1.30 in EPS and $8.4 billion in revenue. Incentives and cancellation rates will show what near-7% mortgages are doing to demand.

THURSDAY, CCL: Carnival reports before the open. Consensus expects roughly $1.29 in EPS. Fuel costs are back at the center of the margin story.

NuScale Power, SMR: UBS downgraded the stock to Sell from Neutral and cut its target to $6 from $10. Against Friday's $8.61 close, the target implies about 30% downside.

Chewy, CHWY: JPMorgan downgraded the stock to Neutral from Overweight and lowered its target to $24 from $29. The target still sits about 17% above Friday's $20.44 close.

Copart, CPRT: Barrington upgraded the stock to Outperform with a $40 target. That is roughly 34% above Friday's $29.95 close.