Wall Street is set for a muted opening on Monday, with investors weighing growing optimism around artificial intelligence against renewed geopolitical tensions in the Middle East.
S&P 500 futures are up 0.1%, while Nasdaq 100 futures gain 0.4%. Dow Jones futures, meanwhile, are down 123 points, or 0.2%.
Semiconductor stocks are leading gains in the technology sector. Micron is up more than 3% in premarket trading, while Broadcom and Nvidia are also higher, following reports that Anthropic generated more than $11.5 billion in second-quarter revenue, a sharp increase from a year earlier.
The picture remains clouded by tensions on the energy front. Oil prices are rising again after a senior Iranian official told Reuters that Tehran could escalate tensions in the Strait of Hormuz and across the region if diplomacy with the United States fails. WTI futures are up nearly 1% at around $83 a barrel, while Brent is also gaining about 1% to around $89.
Market sentiment remains broadly positive. The S&P 500 closed last week at a fresh record high, supported by a particularly strong earnings season. The Wall Street rally has continued despite tensions in the Middle East and concerns over the sustainability of AI-related valuations.
Weaker-than-expected retail sales data and relatively mild inflation have strengthened expectations of a possible easing in Federal Reserve monetary policy. Markets have consequently scaled back expectations of a rate hike at the Fed’s next meeting.
The week is expected to bring relatively few major catalysts, although investors will focus on the release of the minutes from the Federal Reserve’s latest meeting on Wednesday. Several corporate earnings reports are also due, including results from Home Depot, Lowe’s and Walmart.
On the economic front, investors will also be watching the August Empire State Manufacturing Index and the NAHB Housing Market Index.