By Johann M Cherian and Tharuniyaa Lakshmi
Sept 22 (Reuters) – The benchmark S&P 500 and the blue-chip Dow were set for a modestly higher open on Tuesday as investors awaited potential talks between the United States and Iran that could end their six-month-old conflict.
Investors weighed comments by a senior Iranian official to Reuters that Tehran could reopen the Strait of Hormuz within seven days if the US eases pressure. Saudi Arabia also restarted operations at its East-West Pipeline, according to three sources.
Brent crude eased 1.7% following the latest developments, but was still within reaching distance of $100 a barrel, while the yield on the benchmark 10-year Treasury note was at 4.9% – both hovering near levels that spurred market direction in recent days.
“Markets are really seeing oil as the key macro variable here, where both interest rates and the broader market are very much correlated to what’s happening in oil and on the geopolitical front,” said Lale Akoner, global market strategist at eToro.
US-Iran talks are expected on the sidelines of this week’s United Nations General Assembly meeting, followed by a US-China summit on Thursday. Traders hope it will yield a resolution on the Middle East conflict and extend the trade truce with Beijing. President Donald Trump is also scheduled to meet several world leaders later in the day.
At 08:29 a.m. ET, Dow E-minis were up 208 points, or 0.4%, and S&P 500 E-minis were up 6 points, or 0.08%. Nasdaq 100 E-minis were down 8 points, or 0.03%.
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The tech-heavy Nasdaq closed at a record high on Monday, driven by an 11.3% jump in Meta as analysts pointed to its Muse AI agent garnering more downloads in its first 13 days than ChatGPT.
In premarket trading, Meta eased 0.5%, while Alphabet climbed 0.4%, Amazon.com edged up 0.1% and Microsoft inched up 1.1%. Salesforce also rose 1.6% and led gains among Dow components.
On the flip side, chip stocks that have been the biggest beneficiaries of the AI trade this year were lower: Nvidia eased 0.2% and US-listed shares of TSMC and SK Hynix lost around 1% each.
“The market got credible confirmation that its monetization is on track with its AI agent, which has boosted confidence that Meta could finally be turning its huge AI spending into products that consumers will use,” said Akoner.
Federal Reserve policymakers consider AI demand and the oil shock as key inflation drivers. Traders now see a 53.1% chance the central bank will increase interest rates by at least 25 basis points in October, following this month’s hike, the CME Group’s FedWatch Tool showed.
Remarks from at least three central bankers — Fed Vice Chair Philip Jefferson, New York Fed President John Williams and Richmond Fed President Thomas Barkin — are expected later in the day.
Among others, bitcoin retreated 1% from a seven-month high, dragging crypto stocks Strategy and Coinbase lower.
(Reporting by Johann M Cherian in Bengaluru; Editing by Joyjeet Das and Devika Syamnath)
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