Wall Street Higher on AI Optimism Despite Middle East Risks

Wall Street Higher on AI Optimism Despite Middle East Risks

Wall Street's main indexes were poised to open higher on Tuesday, catching up after a public holiday, as optimism in AI-related stocks offset some concerns over Middle East peace talks. Dow futures rose 0.53%, S&P 500 futures 0.67%, and Nasdaq 100 futures 1.09%.

Chip Stocks Lead Gains

Semiconductor stocks surged on AI-driven demand. Marvell Technology rose 6.8%, Micron climbed 7%, while Intel and Qualcomm added 1.6% and 2.5% respectively.

Middle East Developments and Oil Prices

Iran seeks release of $24 billion frozen funds. U.S. Secretary of State Marco Rubio said a deal could take a few days. Brent crude rose 2% but remained below $100 a barrel. Uncertainty over Strait of Hormuz shipping flows persists.

Fed and Inflation Expectations

Kevin Warsh was sworn in as Fed chair. Markets expect rates to remain on hold for the rest of the year, with a 25 bps rate hike seen in December. First-quarter earnings growth is expected at 29% year-on-year.

Consumer Confidence Data Due

U.S. consumer confidence data for May is expected later in the day. Higher gasoline prices due to the Middle East conflict are expected to weigh on consumer sentiment.

Eli Lilly advanced 1.2% after agreeing to buy three vaccine developers in deals worth up to nearly $4 billion. Pony AI's shares climbed 17.5% on plans to expand its robotaxi fleet.