Wall St set for higher open as chips extend gains, Middle East tensions ease

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By Joel Jose and Twesha Dikshit

June 9 (Reuters) – U.S. stock indexes were set to open higher on Tuesday, as chipmakers extended gains for a second day, while easing hostilities in the Middle East also aided sentiment.

Nasdaq futures led gains in early trading, with shares of chipmakers Marvell Technology, Broadcom and Micron Technology rising between 0.4% and 4.2% premarket, rebounding after Friday’s sharp selloff.

Technology and AI stocks came under sharp selling pressure last week, after Broadcom’s disappointing forecast fueled concerns about high valuations in the sector, particularly in chipmakers, which have rallied strongly this year.

“The reason why I think the market’s holding on pretty well is that analysts are still not finished raising their guidance,” said Ken Mahoney, CEO of Mahoney Asset Management.

Despite concerns regarding interest rate hikes, inflation and the Middle East uncertainty, strong earnings expectations, particularly for tech stocks, were driving markets higher, Mahoney said.

Iran and Israel said on Monday they had halted attacks on each other after an appeal from U.S. President Donald Trump, settling back into a tenuous ceasefire announced on April 8.

Oil prices fell more than 2%, erasing most of the previous session’s gains, though caution lingered as diplomatic efforts have yet to yield a lasting peace agreement and the Strait of Hormuz remains shut.

At 08:23 a.m. ET, Dow E-minis were up 108 points, or 0.21%, and S&P 500 E-minis were up 26.5 points, or 0.36%. Nasdaq 100 E-minis were up 206.5 points, or 0.7%.

Consumer prices data for May, due on Wednesday, will be closely watched for fresh clues on how the rise in energy prices due to the Iran war is impacting inflation.

A stronger-than-expected jobs report on Friday added to concerns that the Federal Reserve will raise interest rates this year. Traders are pricing in a 43% chance of a 25 basis point rate hike in December, as per CME Group’s FedWatch tool.

SpaceX’s $1.75 trillion market debut on Friday could also prove to be a hurdle for U.S. stocks as investors worry about possible overexuberance among high-growth technology stocks. Elon Musk’s SpaceX is aiming to raise $75 billion, the most ever for an IPO.

ChatGPT maker OpenAI said on Monday it had confidentially filed for a U.S. initial public offering, joining rival Anthropic in a push toward public markets.

In other company news, Applied Digital rose 11% after it signed a 15-year lease with a U.S.-based hyperscaler at its Delta Forge 2 site, which is expected to generate about $5.2 billion in revenue over the period.Shares of cancer drug developer Nuvalent surged almost 40% after GSK agreed to buy the company for $10.6 billion, in its largest deal in years, valuing Nuvalent at about $124 per share, a 40% premium to the stock‘s last closing price.

(Reporting by Joel Jose, Sruthi Shankar and Twesha Dikshit in Bengaluru; Editing by Shinjini Ganguli)