US stock-index futures advanced on Tuesday, with the Dow Jones Industrial Average climbing over 125 points (0.25%), as a recovery in semiconductor shares and a de-escalation in Middle East hostilities bolstered risk appetite. S&P 500 futures gained 0.39%, while Nasdaq 100 futures rose 0.67%, reflecting broad-based optimism ahead of key inflation data.
Chipmakers Lead the Recovery
Semiconductor stocks were at the forefront of the premarket rebound, with major names like Nvidia, Broadcom, and Micron posting gains between 0.8% and 4.4%. This follows a sharp selloff last week triggered by Broadcom's disappointing forecast, which reignited concerns that valuations in the AI-driven chip sector had become stretched. The rebound suggests investors are selectively buying back into the sector after the recent pullback, though caution remains ahead of Wednesday's consumer price index (CPI) report. For context, the recent volatility in chip stocks was highlighted in our earlier coverage of the Dow plunging 394 points as the chip rout deepened.
Geopolitical Tensions Ease
Risk sentiment improved after Iran and Israel agreed to halt attacks following an appeal from US President Donald Trump to respect a ceasefire. The pause alleviated fears of a broader conflict that could disrupt energy supplies from the region. As a result, oil prices fell more than 2%, reducing one of the key inflation risks that had weighed on markets in recent sessions. Lower energy costs could provide some relief to consumers and businesses, potentially moderating the inflation outlook.
CPI Data in Focus
The market's primary attention is now on Wednesday's May CPI report. A stronger-than-expected jobs report on Friday raised concerns that the Federal Reserve may maintain tighter monetary policy for longer, or even consider rate hikes later this year. Investors will scrutinize the CPI data for signs that higher energy costs linked to the Middle East conflict are feeding into broader inflation. A hot reading could pressure rate-sensitive technology shares, while a softer number might extend the rebound in growth stocks. The upcoming data is critical for assessing the Fed's next moves, especially after recent market swings tied to AI-led tech selloffs.
IPO Pipeline Heats Up
Blockbuster listings are also shaping sentiment. SpaceX is expected to test demand for high-growth technology names with a record-setting IPO that could value Elon Musk's rocket company at approximately $1.75 trillion. The offering is being watched as a gauge of investor appetite for richly valued private-market leaders. Separately, OpenAI has confidentially filed for a US initial public offering, joining rival Anthropic in moving toward public markets. These developments underscore the ongoing interest in AI and space-related equities, despite recent volatility.
Notable Single-Stock Moves
Applied Digital jumped 11.5% in premarket trading after signing a 15-year lease with a US-based hyperscaler at its Delta Forge 2 site. The deal is expected to generate about $5.2 billion in revenue over the lease term, highlighting robust demand for AI data-center capacity. Nuvalent surged 39% after GSK agreed to acquire the cancer-drug developer for $10.6 billion, or about $124 per share in cash. The offer represents a roughly 40% premium to Nuvalent's last closing price and marks a significant oncology push for the UK drugmaker.
As markets await the CPI report, investors remain cautious but optimistic that easing geopolitical risks and a potential moderation in inflation could support further gains. However, the trajectory of Fed policy and corporate earnings will remain key drivers in the weeks ahead.
This article is for informational purposes only and does not constitute financial advice.
