US equity futures dropped ahead of Monday's opening bell, with futures of the technology-heavy Nasdaq Composite leading the losses amid concerns surrounding the artificial intelligence sector.

Dow Jones Industrial Average futures fell 0.7%, S&P 500 futures dropped 2%, and Nasdaq futures were down 3.5%.

Nvidia (NVDA) and other artificial intelligence players were sharply lower after the rapid rise of Chinese artificial intelligence startup DeepSeek, which launched an open-source artificial intelligence model that can potentially run on less-advanced chips.

Oil prices were lower, with front-month global benchmark North Sea Brent crude down 0.7% at $77.00 per barrel and US West Texas Intermediate 0.7% lower at $74.11 per barrel.

New home sales, scheduled for release at 10 am ET, are expected to have risen to a 669,000 annual rate in December from 664,000 in the preceding month.

In other world markets, Japan's Nikkei closed 0.9% lower, Hong Kong's Hang Seng ended 0.7% higher, and China's Shanghai Composite finished 0.06% lower. Meanwhile, the UK's FTSE 100 fell 0.2%, and Germany's Dax index dropped 0.8% in Europe's early afternoon session.

In equities, Nvidia shares fell 12% pre-bell, while ASML (ASML), Advanced Micro Devices (AMD), Broadcom (AVGO), and Micron Technology (MU) were also down between 4% to 10% amid the DeepSeek threat. Microsoft (MSFT) shares fell 4% after Reuters reported that more Indian news outlets joined a copyright lawsuit against OpenAI.

On the winning side, Aurora Mobile (JG) shares were up over 170% after the company said its business-oriented AI agent platform GPTBots.ai has integrated the DeepSeek R1 large language model. Akero Therapeutics (AKRO) stock increased more than two-fold after the company said its phase 2b trial of a drug candidate for biopsy-confirmed compensated cirrhosis showed "statistically significant" preliminary results.