US stock index futures edged higher on Monday as fresh artificial intelligence updates from Nvidia and Microsoft lifted technology sentiment, helping investors look past oil-price gains and continued uncertainty around US-Iran tensions.
Nvidia rose in premarket trading after unveiling a new chip designed to bring AI capabilities to laptops and desktops, while Microsoft also gained on expectations of deeper AI integration in personal computers.
The early advance suggests Wall Street may extend May’s momentum, though Friday’s jobs report and Federal Reserve signals remain key risks.
5 things to know before Wall Street opens
1. Futures point to a firmer start
S&P 500 and Nasdaq-100 futures each gained 0.3%, while Dow futures rose 208 points, or 0.4%.
The gains suggest investors are still willing to add risk after Wall Street’s main indexes ended May near record levels.
The tone remains constructive, but not euphoric, as traders balance AI optimism against inflation, oil and geopolitical risks.
2. Nvidia and Microsoft lift AI sentiment
Nvidia gained 1.6% in premarket trading after announcing a new AI-integrated chip for laptops and desktops. The product was developed through a three-year partnership with Microsoft, whose shares rose 2.8%.
The update reinforced the view that the AI trade is expanding beyond data centres into personal computing.
That kept investor appetite focused on technology leaders even as rival chipmakers slipped, with AMD down 3.4% and Intel off 2.9%.
3. Chip names remain in focus
Cadence Design Systems jumped 8.2% after launching an autonomous engineering tool for chip design powered by Nvidia.
Micron also advanced 5.3%, moving above $1,000 for the first time after a sharp rally in May.
The next major test for semiconductor sentiment is Broadcom’s results on Wednesday.
As the second-largest US chipmaker by market value after Nvidia, its numbers could help determine whether the AI rally remains broad or stays concentrated in a handful of leaders.
4. Oil rise keeps inflation risk alive
Oil prices climbed as US-Iran tensions continued to unsettle markets.
The renewed hostilities pushed oil higher, raising concern that energy costs could feed into inflation and complicate the path for interest rates.
For equities, that creates a familiar tension. AI enthusiasm is supporting growth stocks, but higher oil prices and bond-yield pressure could limit gains if investors begin pricing in tighter monetary policy.
5. Jobs data and Fed signals are next
Investors are now looking to Friday’s US jobs report, Fed speakers and the Beige Book for clues on whether inflation and labour-market conditions justify a more restrictive policy stance.
Markets are pricing a roughly 70% chance of a 25-basis-point rate increase by year-end.
That makes this week’s data especially important. A stronger jobs print could lift yields and pressure equities, while softer numbers may give the AI-led rally more room to run.
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