S&P futures experienced a notable increase early Wednesday, driven by a rally in the technology sector, particularly led by memory chipmaker Micron, while oil prices declined amid optimistic expectations for a truce in Iran. The S&P 500 and Nasdaq Composite reached new highs in the previous session. S&P 500 futures were 0.3% higher, while futures tied to the Dow Jones Industrial Average added 227 points, or 0.45%. Nasdaq 100 futures exhibited an increase of 0.49%. Micron Technology experienced an increase of over 5% in premarket trading, contributing to a remarkable performance that saw the shares rise 19% on Tuesday, surpassing a market capitalisation of $1 trillion for the first time. Investors have redirected their focus towards memory chip manufacturers as their preferred avenue to capitalise on the AI bull market.

Micron’s South Korean counterpart SK Hynix achieved a market valuation of $1 trillion overnight. Micron, whose shares have more than tripled this year, received a significant boost on Tuesday following UBS’s assertion that the stock could more than double from its current level. This optimism is attributed to long-term agreements being established by memory suppliers to support the implementation of AI. WTI crude prices experienced a decline in early trading, falling by 4% to approximately $90 a barrel. During Tuesday’s session, a rally in the technology sector propelled both the broad market index and tech-heavy Nasdaq to new intraday and closing highs. The S&P 500 increased by 0.61%, whereas the Nasdaq rose by 1.19%.

Conversely, the blue-chip Dow experienced a decline of 118.02 points, representing a decrease of 0.23%. Investors received a boost from President Donald Trump’s statements suggesting that negotiations with Iran aimed at resolving the conflict were “proceeding nicely.” In the early hours of Tuesday, the United States executed strikes in southern Iran, characterised as “self defense.” Central Command spokesman Tim Hawkins emphasised that the U.S. exercised “restraint during the ongoing ceasefire” between the two nations. Crude oil has declined from its Friday close of approximately $97 a barrel, yet it remains around the $90 threshold as traders anticipate more definitive confirmation regarding a potential agreement to open the Strait of Iran.

Expectations for a reduction in tensions with Iran, coupled with robust earnings reports, have driven stock prices to a historic high this month. However, Drew Pettit, U.S. equity strategist at Citi, perceives limited potential for further stock gains from this point onwards. “You got yields higher, like 4.50% on the [U.S. 10-year Treasury] , and you have inflation expectations higher in a curve that’s actually gotten flatter throughout the year. All of that doesn’t set you up for a higher sustainable multiple at this point,” he said on Tuesday afternoon. Pettit’s 7,700 year-end target for the S&P 500 suggests a modest increase of merely 2% for the index. Goldman Sachs has revised its year-end S&P 500 target upward to 8,000 from 7,600, as of late Tuesday, based on the expectation that earnings growth will remain robust despite certain geopolitical challenges.