By Johann M Cherian and Tharuniyaa Lakshmi
Sept 21 (Reuters) – The main US stock indexes were on track to rise at the open on Monday, boosted by AI-led gains, as Treasury yields retreated and crude prices tumbled more than 2% to hit an 11-day low on indications of progress in Middle East negotiations.
While Washington and Tehran continued to exchange new threats through the weekend, US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected in New York this week at the UN General Assembly.
Doomsday calls from the bosses of leading AI companies a week ago had sparked a rout, but the concerns seemed to dissipate on Monday as investors focused on signs that spending on developing the technology was still expanding.
Chip companies such as Intel rose 5.7%. Marvell added 2.8%, while Meta and Dell advanced 2.3% each in premarket trading. Accenture also gained and was up 4.6% after partnering with Anthropic to invest $2 billion in AI evaluation.
“We are past the local peak in (Middle East) tensions, and we should see some move towards normalization in the coming weeks. Our theory remains that the first couple of weeks of October could be a sweet spot for some sort of fudge between (the) US and Iran,” said Mohit Kumar, an economist at Jefferies.
A fall in oil prices eased the pressure on equities as the 10-year US bond yield slipped below the critical 5% mark. Energy-price-sensitive airlines such as Delta and American gained about 1.8% each.
Still, investors are wary of the interest-rate outlook after a recent pickup in inflation prompted the US Federal Reserve to raise rates for the first time in three years. Markets see a 50% chance of another hike next month, CME’s FedWatch showed.
Commentary from at least 10 central bank policymakers is due this week.
Chicago Fed President Austan Goolsbee said there was “no ambiguity” about the need for higher interest rates, with inflation pressures now moving beyond tariffs and energy prices to strong demand.
At 08:34 a.m. ET, Dow E-minis rose 438 points, or 0.84%, S&P 500 E-minis added 51.5 points, or 0.67%, and Nasdaq 100 E-minis gained 313.5 points, or 1.05%.
A diplomatic breakthrough between the United States and Denmark over the weekend on the status of Greenland also aided sentiment and is likely to allay trade tensions between the countries.
US-listed shares of companies exposed to Greenland rose. Critical Metals soared 27%, while Greenland Mines and Greenland Energy both more than doubled in value.
The China-US summit on Thursday could touch upon topics including potentially extending the trade truce between the two superpowers, the Iran war, as well as regulation on advances in AI.
Scott Bessent and Chinese Vice Premier He Lifeng concluded talks on Sunday during which the US Treasury secretary proposed a new mechanism for AI safety notifications.
Bitcoin, a key marker for risk appetite, rose 5.1% to hit a more-than-seven-month high, lifting Coinbase and Strategy over 5% each.
Warner Bros was up 7.2% after a report Paramount discussed concessions in advanced settlement negotiations with California’s attorney general that could help close the proposed merger between the two companies.
(Reporing by Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru; Editing by Mrigank Dhaniwala and Pooja Desai)
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