S&P futures experienced an uptick early Tuesday, driven by a rebound in chip stocks for a second consecutive day following last Friday’s decline, while oil prices retreated amid optimism regarding a potential U.S.-Iran agreement. S&P 500 futures were up about 0.39%, while the Nasdaq 100 futures rose 0.67%. Futures for the Dow Jones Industrial Average increased by 95 points, reflecting a rise of 0.19%. Micron experienced an increase of nearly 4% in early trading, building on a 10% recovery observed on Monday. The shares experienced a decline of approximately 20% over the two days concluding last week, which included a significant drop of 13% on Friday. Qualcomm experienced a 3% increase in early trading, marking a second consecutive day of gains following an 11% decline on Friday. The iShares Semiconductor ETF experienced a 2% increase in early trading, building on a 6% recovery observed on Monday. The ETF experienced a decline of 10% on Friday, marking its most significant drop in six years, as investors expressed concerns that the rapid ascent of AI-driven semiconductor stocks may have been excessive and unsustainable.

WTI crude oil declined approximately 2%, trading below $90 a barrel, following President Donald Trump’s assertion that a deal between the U.S. and Iran could be finalised in “two or three days,” which would lead to the immediate opening of the Strait of Hormuz. Iran on Monday suspended military strikes against Israel, yet cautioned that it would recommence attacks should Israeli forces persist in their operations in Lebanon, as stated by Tehran’s foreign ministry on Monday. Hours later, Israeli Prime Minister Benjamin Netanyahu stated that the conflict with Iran and Hezbollah was “not yet over.” In Asia, Japan’s Nikkei 225 experienced an increase of over 2%, concluding the trading day at 65,416.63. Meanwhile, South Korea’s Kospi made a notable recovery from Monday’s decline, surging 8.18% to reach 8,096.93. Hong Kong’s Hang Seng Index increased by 0.15%, whereas the mainland’s CSI 300 rose by 1.87% to reach 4,801.81. Australia’s benchmark index experienced a decline of 0.24%, settling at 8,604.2.

Chip stocks propelled the S&P 500 upward during regular trading on Monday, resulting in a 0.3% increase in the index. The tech-dominant Nasdaq Composite experienced an increase of 0.86%. Both averages recovered a portion of their losses incurred during last week’s technology sell-off. The blue-chip Dow, conversely, diverged from the prevailing trend, declining by 80.77 points, or 0.16%. While the artificial intelligence and chip trade has been the main market driver on Monday and in recent sessions, Brian Kersmanc expressed some scepticism regarding the sustainability of this trend. “What the issue is on a longer-term basis is sustainability,” Kersmanc said. “So, how much further does this sustain on a longer-term basis?” And “At the end of the day, a lot of these chip names are commodities,” the portfolio manager added. “And if you consider it from a commodity perspective, the rapid price increase observed — in certain segments of memory, there was a 15x price surge over the past year — if I were to reframe that … a 15x rise in energy prices, moving from $60 a barrel to $900 a barrel, how many energy stocks would investors be acquiring at this moment?”

OpenAI has confidentially submitted its initial public offering paperwork late Monday, contributing to the growing excitement surrounding the artificial intelligence sector. Space and AI intersect as SpaceX prepares for its inaugural public offering on Friday, which is anticipated to be the largest IPO in history. The offering is perceived by some as a catalyst for the AI-driven bull market; however, certain investors express caution, suggesting it may signify a peak in the trend given its $1.75 trillion valuation. Traders will engage with economic data on Tuesday, as April’s wholesale inventories and May’s existing home sales are set to be released.