Wall Street pointed to a stronger open on Monday, with Nasdaq 100 futures surging approximately 320 points, as investors welcomed signs of de-escalation between the United States and Iran. The move marks a sharp reversal from last week's selloff, though lingering concerns over AI-related costs and the Federal Reserve's next policy move continue to temper enthusiasm.
1. Nasdaq Futures Lead Broad Market Rebound
Dow Jones Industrial Average futures rose 205 points, or 0.39%, while S&P 500 futures gained 0.74%. Nasdaq-100 futures led the advance, climbing 1.08% as technology shares drove the premarket rebound. The move followed a difficult stretch for growth stocks last week, when concerns over AI valuations and higher borrowing costs weighed on the market. The Dow held up better than the S&P 500 and Nasdaq, rising 0.6% over the week.
2. US-Iran De-escalation Boosts Risk Appetite
The immediate catalyst came from reports that Washington and Tehran are stepping back from military escalation and restarting talks aimed at ending hostilities. A US official indicated both sides would reduce tensions, raising hopes that an interim peace agreement could hold. Markets have been highly sensitive to developments in the Gulf, as any renewed threat to the Strait of Hormuz could quickly lift oil prices. Strategists noted that the administration's push to keep talks alive appears partly aimed at containing crude prices and supporting risk assets.
3. AI Cost Worries Persist Despite Rally
Despite the upbeat tone, the technology sector faces an overhang from last week's selloff, which hit semiconductor shares and the Magnificent Seven after investors questioned whether heavy AI spending can continue to deliver earnings growth. Apple remains in focus after falling 4.8% last week. The company raised prices on some iPads and MacBooks, citing rising memory and storage chip costs that have become harder to absorb. This has sharpened the debate around the AI boom: chipmakers are enjoying stronger demand, but device makers and consumers are starting to feel the cost. For more on AI-driven demand, see our coverage of Seagate Shares Surge After Wells Fargo Upgrade on AI-Driven HDD Demand.
4. Jobs Data and Fed Rate Bets Remain Key Test
Traders still expect at least one Fed rate hike this year as policymakers try to control inflation. That view could shift later this week when the US releases June labour-market data. A strong payrolls report would support the case for tighter policy and could pressure richly valued growth stocks. A softer number may give equities some breathing room by easing rate expectations. For now, the market is treating the jobs report as the next major test of the rebound. The broader market context is also shaped by recent moves in major indices, as seen in our article on Dow Gains 70 Points as SK Hynix's $26.5B Nasdaq Listing and Iran Tensions Drive Caution.
5. SpaceX Stock Surges in Pre-Market on Nasdaq 100 Inclusion
SpaceX rose in premarket trading after Nasdaq announced the newly listed company will join the Nasdaq 100 on July 7, a move likely to attract buying from index-tracking funds. The inclusion is significant because funds and ETFs that track the index will need to adjust their portfolios, potentially creating fresh demand for the stock. It also gives SpaceX a higher profile among large-cap growth investors just weeks after its market debut. Meanwhile, the AI sector continues to see mixed signals, with some companies like Meta leading gains, as detailed in Meta Leads Magnificent 7 Surge: Custom AI Chip and Model Launch Fuel 6% Rally.
This article is for informational purposes only and does not constitute financial advice.
