Aug 25 (Reuters) – U.S. stock index futures inched up on Tuesday as technology stocks recovered from sharp declines in the previous session and investors awaited a key inflation report and results from AI bellwether Nvidia.
The benchmark S&P 500 and the tech-heavy Nasdaq closed lower on Monday after a selloff in semiconductor shares, with markets balancing AI-driven growth against lofty valuations.
Most megacaps were higher in premarket trading on Tuesday, with Nvidia up 1.3% and Meta gaining 1%.
Memory chipmaker Micron added 2.3%, while data-storage companies Western Digital and Sandisk rose 2.7% and 3%, respectively.
Markets largely shrugged off a U.S. threat that countries continuing to trade with Iran could be forced out of the dollar-based finance system, though no specific countries were named and no timelines provided for when the penalties might take effect.
“Bessent framed the economic plan as a means to bring Iran to the negotiating table and for the U.S. to gain an upper hand, than an escalation,” said Mohit Kumar, an economist at Jefferies.
“Our base case remains that Iran would want to exert more pressure on the U.S. in the short term, but eventually agree to a deal before the mid-terms when Trump would be willing to make most concessions.”
At 05:23 a.m. ET, Dow E-minis rose 176 points, or 0.33%, S&P 500 E-minis gained 30.25 points, or 0.39%, and Nasdaq 100 E-minis added 219 points, or 0.75%.
Investors are bracing for a slew of catalysts this week, with Nvidia’s quarterly report scheduled for release after markets close on Wednesday and personal consumption expenditures data due before the open.
The AI chip giant is expected to show AI-driven demand remains robust. Any signs of slowing growth could reignite concerns over stretched valuations and how far the AI-fueled rally can run.
Markets have grown increasingly wary of cyclical spending in the sector and the methods hyperscalers are using to fund their AI buildouts, which are starting to show signs of straining their financials.
Concerns over ballooning government debt and elevated oil prices pushed the 30-year Treasury yield to a 19-year high last week, battering technology stocks and putting the three indexes in the red for the week.
The U.S. Treasury’s intervention, including increased buybacks and reports that it will tap its general account to fund those buybacks, however, helped calm some jitters.
Meanwhile, the PCE report could provide greater clarity on price pressures in the economy after a tame consumer inflation reading this month materially tempered bets on an imminent interest-rate hike from the U.S. Federal Reserve in September.
Still, money market participants are pricing in one 25-basis-point rate increase by the end of the year, according to LSEG data.
Against this backdrop, Fed Chair Kevin Warsh’s Jackson Hole speech on Friday will be closely watched for how the central bank will approach monetary policy amid the Treasury intervention and the latest economic data.
(Reporting by Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
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