US stock index futures rose on Tuesday, as a decline in Treasury yields from multi-year highs and oil prices ahead of the quarterly earnings season boosted heavyweight technology stocks.
Nvidia rose 0.9% in premarket trading. The company was last valued at $5.81 trillion.
The tech-heavy Nasdaq closed at a record high on Monday, lifted by heavyweights Nvidia and Microsoft , as investors continued to bet on the AI boom that has pushed stock markets to record highs.
The benchmark S&P 500 closed just 0.6% below its mid-August peak, keeping the bull market that began in October 2022 intact.
Optimism around the AI trade and expectations of strong corporate earnings have helped US stocks outperform global peers over the past six months despite higher energy prices and a volatile summer for bond markets that fueled concerns about tighter monetary policy.
"Enthusiasm about AI investment seems to have continued for a while longer, as the weak US jobs data and the pushback of an October Fed hike allowed investors to cheer strong present values for high-growth firms," said Charalampos Pissouros, senior market analyst at Trading Point.
The yield on 30-year Treasury bonds fell to 5.62%, having touched a 2002 high of 5.702% a day earlier, while the yield on the benchmark 10-year bond also dipped.
A softer-than-expected payrolls report last week eased expectations around rate hikes this year. Traders now see a 78% chance of the Federal Reserve holding interest rates steady this month, though a December rate hike remains largely priced in, according to the CME Group's FedWatch tool.
Later on Tuesday, at least four Fed officials, including New York Fed President John Williams, are slated to deliver public remarks.
At 07:29 a.m. ET, Dow E-minis were up 281 points, or 0.55%, S&P 500 E-minis were up 30.75 points, or 0.39% and Nasdaq 100 E-minis were up 192 points, or 0.61%.
Oil prices fell almost 2% on Tuesday, with Brent crude trading at $98.35 as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns.
'Magnificent Seven' stocks edged higher, with Meta, Tesla and Amazon.com climbing over 0.5% each.
Chipmakers were also on the rise, with AMD up 1.9% after CEO Lisa Su said the company planned to substantially increase chip supply in 2027 to meet booming AI demand.
The third-quarter earnings season kicks off next week. Analysts on average expect S&P 500 earnings to jump over 30% year over year in the quarter, thanks largely to AI-related stocks, according to LSEG data.
Among individual movers, Option Care Health jumped 21% after reports that healthcare group McKesson and private equity firm Clayton Dubilier & Rice were closing in on a deal to buy the infusion services provider for nearly $5 billion.
Constellation Energy gained 6.4% after Alphabet's Google entered into a 3,590-megawatts power deal with the company. - Reuters
