Key Takeaways:
US stock-index futures advanced Tuesday as semiconductor shares extended a recovery from last week's rout and oil prices retreated on signs a US-Iran deal may be imminent, restoring appetite for risk assets.
S&P 500 futures rose 0.39%, while Nasdaq 100 futures gained 0.67%. Dow Jones Industrial Average futures added 95 points, or 0.19%. The moves follow Monday's regular session where the S&P 500 edged up 0.3% and the Nasdaq Composite climbed 0.86%, clawing back some of last week's tech-driven losses.
"The chip sector is finding its footing after an overdone selloff, but the question is whether this is a dead-cat bounce or the start of a sustained recovery," said Brian Kersmanc, portfolio manager at GQG Partners. "At the end of the day, a lot of these chip names are commodities. When you had a 15x price increase in memory over the past year, you have to ask how sustainable that is."
Micron Technology rose nearly 4% in pre-market trading, adding to a 10% rebound Monday after tumbling about 20% over the prior two sessions. Qualcomm gained 3%, extending its recovery from an 11% drop Friday. The iShares Semiconductor ETF advanced 2% in early trading following a 6% bounce Monday, paring some of its 10% plunge Friday — the worst single-day drop in six years.
The rebound in tech was supported by a pullback in energy prices. WTI crude oil shed about 2% to trade below $90 a barrel after President Donald Trump said a deal between the US and Iran could be reached in "two or three days" that would open the Strait of Hormuz "immediately." Iran on Monday halted military strikes against Israel but warned it would resume attacks if Israeli forces continue operations in Lebanon, according to Tehran's foreign ministry.
Overnight, Asian markets rallied on the improved risk backdrop. Japan's Nikkei 225 surged 2% to 65,416.63, while South Korea's Kospi jumped 8.18% to 8,096.93, rebounding from Monday's slump. Hong Kong's Hang Seng Index edged 0.15% higher and the CSI 300 rose 1.87% to 4,801.81.
The AI trade received a fresh narrative boost after OpenAI confidentially filed for an IPO late Monday. SpaceX is also set to debut Friday in what would be the largest IPO ever, with a $1.75 trillion valuation that some investors worry could mark a peak in the AI-driven bull market.
Traders will parse April's wholesale inventories and May's existing home sales data later Tuesday for further clues on the economic trajectory.
This article is for informational purposes only and does not constitute investment advice.
