S&P 500 futures slipped slightly on Tuesday, a day after the Nasdaq closed at a record high on AI-driven gains. Traders are watching for possible US-Iran talks and a Thursday summit between Donald Trump and Xi Jinping, while Dow Jones and Nasdaq futures moved in opposite directions.
At 5:28 a.m. ET, S&P 500 E-minis were down 6.25 points, or 0.08%, while Dow E-minis added 12 points, or 0.02%, and Nasdaq 100 E-minis slipped 17.5 points, or 0.06%. The moves followed a session in which the Nasdaq closed at a record high on Monday. An 11.3% jump in Meta drove the gain, after analysts pointed to its Muse AI agent gathering more downloads in its first 13 days than ChatGPT.
Meta's AI surge lifts big tech, chip stocks lag
In premarket trading, Meta added 0.5%, while Alphabet climbed 0.8%, Amazon.com edged up 0.6% and Microsoft inched up 0.4%. Chip stocks that have led this year's AI trade moved lower instead: Nvidia eased 0.2%, and US-listed shares of TSMC and SK Hynix each lost over 1%.
According to UBS: "Muse provides early evidence that consumer AI agents could achieve broad adoption", offering new AI monetization opportunities beyond enterprise use. Bitcoin also retreated, dropping 1.3% from a seven-month high and dragging crypto-linked stocks Strategy and Coinbase lower.
Iran talks and Fed rate bets weigh on sentiment
Oil and Treasury yields held near recent levels as investors weighed a possible resolution to the Iran conflict. Brent crude traded near $100 a barrel and the 10-year Treasury yield stood at 4.9%, after a senior Iranian official told Reuters that Tehran could reopen the Strait of Hormuz within seven days if the US eases pressure.
Traders now see a 57.6% chance the Federal Reserve will raise interest rates by at least 25 basis points in October, per the CME Group's FedWatch Tool, with the central bank weighing AI demand and the oil shock as key inflation drivers. Remarks from Fed Vice Chair Philip Jefferson, New York Fed President John Williams and Richmond Fed President Thomas Barkin are expected later Tuesday.
China summit adds an AI dimension
US-Iran talks are expected on the sidelines of this week's UN General Assembly meeting, ahead of the Trump-Xi summit on Thursday. Investors are also positioning around deepening financial ties between the two countries' AI sectors. Wall Street banks have this year acted as bookrunners on 19 Chinese high-tech equity capital market deals worth $17.2 billion, nearly 30% of the sector's total issuance. Meanwhile, the value of US equities held by Hong Kong and mainland Chinese investors climbed 23% over the past year to top $750 billion.
Sources: Investing.com, Reuters
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