June 29 (Reuters) – U.S. stock index futures rose on Monday, led by strong gains in the tech-heavy Nasdaq 100, as easing tensions in the Middle East lifted sentiment following days of hostilities between the United States and Iran.
A U.S. official said on Sunday that both sides will de-escalate and renew talks to end the war, bolstering hopes that an interim peace deal signed earlier this month could hold.
While diplomatic efforts to put an end to the conflict have calmed investors, caustic rhetoric and occasional flare-ups in the region have at times raised the risk of a broader escalation that could push oil prices higher.
“Predictably, the overtures made by the U.S. and Iran have reversed significantly just before market open once again, with both sides suggesting they’ll wind down strikes ahead of the next round of talks,” said Kyle Rodda, senior financial market analyst at Capital.com.
“Such overt efforts to lower oil prices and boost stocks by the Trump administration are supporting hopes that it’ll do whatever is necessary to get a deal done.”
At 5:00 a.m. ET, S&P 500 E-minis were up 50 points, or 0.68%, and Nasdaq 100 E-minis rose 298.75 points, or 1.02%.
Dow E-minis were up 155 points, or 0.3%. The blue-chip index held up better than the other Wall Street benchmarks last week, gaining 0.6%.
AI WORRIES COMPLICATE OUTLOOK
Concerns about AI spending have injected an additional dose of uncertainty into the market. A selloff last week punished investor favorites such as semiconductors and the so-called Magnificent Seven.
Apple’s shares were underperforming their Magnificent Seven peers in premarket trading on Monday, following a 4.8% drop last week.
The company raised iPad and MacBook prices on Thursday, saying it could no longer shield customers from soaring memory and storage chip costs driven by the AI industry’s data center buildout.
“If consumer demand softens in response, the volumes underpinning record chip margins look increasingly fragile — feeding back into earnings growth skepticism,” said Fabien Yip, market analyst at IG.
Traders are also expecting at least one rate hike by the Federal Reserve this year to keep inflation under control. They would likely reassess those bets later this week, when the U.S. releases the jobs data for June.
In the premarket session, SpaceX rose 1.2% after Nasdaq said the newly listed company will be added to the Nasdaq 100 index on July 7.
Shares of Viridian Therapeutics jumped 12.7% after the U.S. Food and Drug Administration approved its drug to treat patients with thyroid eye disease.
(Reporting by Niket Nishant in Bengaluru; Editing by Shinjini Ganguli)
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