U.S. equity futures moved higher on Tuesday as investors assessed signs of de-escalation in the Middle East and a rebound in artificial intelligence-related technology stocks. Markets were also digesting OpenAI’s confidential filing for a potential stock market debut, while Applied Digital (NASDAQ:APLD) surged in premarket trading after securing a major long-term infrastructure agreement.
Markets Look Ahead to Inflation Data
As of 03:28 ET (07:28 GMT), futures linked to the S&P 500 were up 0.2%, Nasdaq 100 futures gained 0.5%, and Dow futures were broadly flat.
Wall Street finished Monday with mixed results. The Dow Jones Industrial Average slipped 0.2%, while the S&P 500 rose 0.3% and the Nasdaq Composite gained 0.9%. Deutsche Bank analysts described the overall tone as “cautious.”
Semiconductor shares led the advance, recovering after last week’s sharp sell-off sparked by Broadcom’s (NASDAQ:AVGO) earnings report. The Philadelphia Semiconductor Index climbed 5.61%, regaining around half of Friday’s decline.
Investors will monitor April U.S. trade figures and May existing home sales data later today, although attention remains centred on Wednesday’s CPI report, which is expected to influence expectations for Federal Reserve policy.
Markets are increasingly pricing in at least one further interest-rate increase this year amid concerns over inflationary pressures linked to the Middle East and continued strength in employment data.
Hopes of an Iran Deal Support Sentiment
Deutsche Bank analysts suggested that recent developments in the region continue to follow a familiar pattern.
“[I]t seems the cycle of ‘near a deal, not near a deal, escalation, de escalation, maybe back near a deal’ continues,” they wrote, adding that they are currently “back in the ‘a deal is still possible’ camp.”
The comments followed announcements from Iran and Israel that they had suspended attacks after a fresh exchange of strikes earlier in the week. However, uncertainty persists, with Israeli Prime Minister Benjamin Netanyahu maintaining that operations against Hezbollah in Lebanon will continue.
President Donald Trump said he had held a “very good conversation” with Netanyahu and predicted that Israel and Iran would avoid further conflict for at least a week. He also stated that a “total victory” over Iran could be achieved within the next two weeks.
Oil prices declined following the developments, although Brent crude remains elevated compared with pre-conflict levels. The disruption to shipping through the Strait of Hormuz continues to fuel concerns over inflation and economic growth.
OpenAI Files Confidentially for Public Listing
OpenAI revealed that it has confidentially submitted paperwork for an initial public offering, becoming the latest artificial intelligence company preparing for a possible stock market listing.
The company stated that “it may be a while” before an IPO takes place, noting that there are several initiatives that are easier to pursue as a private business. It also highlighted a “complicated set of tradeoffs” that need to be considered before moving ahead.
OpenAI, led by Sam Altman and best known for ChatGPT, has emerged as one of the most influential companies in the AI boom that has helped drive equity markets higher.
Its filing follows Anthropic’s IPO submission last week, while SpaceX is reportedly preparing what could become the largest public offering ever completed.
South Korean Chipmakers Rebound
Samsung Electronics (USOTC:SSNHZ) and SK Hynix (USOTC:HXSCL) recovered strongly after suffering steep losses in the previous session.
SK Hynix surged more than 15%, aided by a multi-year supply agreement with Nvidia for advanced memory products. Samsung climbed nearly 9%, reversing part of Monday’s 10.2% decline.
The two companies had been caught up in a broader retreat across AI-related stocks following concerns over interest rates and Broadcom’s outlook.
Applied Digital Jumps on Major Lease Agreement
Applied Digital (NASDAQ:APLD) rose more than 11% in premarket trading after announcing a 15-year lease agreement with a U.S.-based hyperscale customer.
The contract is expected to generate approximately $5.2 billion in revenue and covers 210 megawatts of computing capacity at the company’s Delta Forge 2 artificial intelligence campus.
Applied Digital said around 70% of its contracted revenue is now linked to major U.S. hyperscale customers. While the company did not disclose the identity of the client, it said the agreement could generate as much as $12.7 billion over 30 years if extended.
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