Technology shares extended their record-setting rally into Wednesday, with Nasdaq 100 futures climbing 0.8% to an intraday high as chip stocks surged and oil prices fell on hopes for a US-Iran truce.
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Nasdaq 100 futures rise 0.8% as tech rally extends, oil retreats
Technology shares extended their record-setting rally into Wednesday, with Nasdaq 100 futures climbing 0.8% to an intraday high as chip stocks surged and oil prices fell on hopes for a US-Iran truce.
Nasdaq 100 futures rose 0.8% to an intraday high Wednesday, extending a tech-driven rally that pushed the S&P 500 and Nasdaq Composite to record closes in the prior session. S&P 500 futures added 0.3%, while Dow Jones Industrial Average futures gained 0.2%.
"The AI trade continues to broaden beyond the Magnificent Seven into memory and semiconductor names, and that's providing a powerful tailwind for the Nasdaq," said Drew Pettit, US equity strategist at Citigroup. Pettit has a 7,700 year-end target for the S&P 500, implying a modest 2% gain from current levels.
The tech-heavy Nasdaq Composite surged 1.19% on Tuesday to close at a record, alongside the S&P 500's 0.61% gain, while the blue-chip Dow slipped 0.23%. Micron Technology shares soared 19% in the prior session to top $1 trillion in market capitalization for the first time, and pointed another 8% higher before the bell Wednesday. South Korean peer SK Hynix crossed the $1 trillion threshold in Seoul trading overnight. Marvell Technology, set to report quarterly results after the bell, advanced 6.5% in premarket trading.
The rally comes as investors weigh whether stretched equity valuations can be sustained against a backdrop of elevated bond yields. The S&P 500 trades at about 22 times forward earnings, above its 10-year average, while the 10-year Treasury yield has hovered near 4.50%. Goldman Sachs raised its year-end S&P 500 target to 8,000 from 7,600 late Tuesday, citing stronger earnings expectations following a robust first-quarter reporting season.
The advance in chip stocks has broadened beyond the initial AI beneficiaries. Memory chip makers have become a favored way to play the AI bull market, with UBS raising its Micron price target to $1,625 from $535 on Tuesday, citing long-term supply agreements fueling AI implementation. Barclays upgraded SanDisk to Overweight from Equal Weight and nearly doubled its price target to $2,300.
Oil prices declined, providing a tailwind for equities. Front-month Brent crude futures pulled back 2.6% to about $97 a barrel, while West Texas Intermediate futures fell 3.5% to $90.55. The retreat followed a US attack on two Iranian ships in the Strait of Hormuz, though Secretary of State Marco Rubio noted a formal peace agreement could take several days to finalize. President Donald Trump said talks with Iran were "proceeding nicely."
The 10-year Treasury yield fell below 4.48%, down from Tuesday's close above 4.49%. The US dollar index ticked lower to 99.12. Gold futures declined 1.2% to $4,445 an ounce. The Cboe Volatility Index stood at 16.92, down 0.5%.
Among individual movers, Tesla rose more than 2% in premarket trading, extending a 1.8% gain from Tuesday that led the Magnificent Seven. Salesforce shares were nearly 1% lower ahead of its earnings report after the close, having lost nearly a third of their value since the start of the year. Zscaler tumbled almost 25% after the cybersecurity company issued a cautious outlook, while Insulet fell 5.5% following a voluntary medical device correction for certain insulin pods.
This article is for informational purposes only and does not constitute investment advice.
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