U.S. Stock Market - S&P 500 and Dow Jones Index Expected to Open Higher as Market Focuses on Middle East Developments

Latest developments before market open

Johann M Cherian/Tharuniyaa Lakshmi

Reuters, Sept 22 - On Tuesday, benchmark S&P 500 and blue-chip Dow Jones are set to open slightly higher, as investors await potential talks between the US and Iran aimed at ending a six-month-long conflict between the two countries.

Investors are weighing comments from a senior Iranian official to Reuters: if the US eases its pressure, Tehran could reopen the Strait of Hormuz within seven days (link). According to three sources, Saudi Arabia has resumed operations on its East-West oil pipeline.

Due to these latest developments, Brent crude LCOc1 fell 1.7% but remained near $100 per barrel; meanwhile, benchmark 10-year US Treasury yield US10YT=RR held at 4.9%—both measures are hovering near levels that have dominated recent market moves.

“The market is indeed viewing crude oil as the key macro variable at the moment; interest rates and the broader market are closely correlated with the movements in crude and the geopolitical situation,” said eToro Global Market Strategist Lale Akoner.

US-Iran talks are expected during the United Nations General Assembly this week, followed by a US-China summit on Thursday. Traders are hoping the meetings will lead to a resolution of the Middle East (link) conflict and an extension of the trade truce with Beijing (link). President Donald Trump also plans to meet with several world leaders later in the day (link).

At 8:29 a.m. EST, Dow Jones E-mini futures YMcv1 rose 208 points, or 0.4%; S&P 500 E-mini futures EScv1 gained 6 points, or 0.08%; Nasdaq 100 E-mini futures NQcv1 dropped 8 points, or 0.03%.

Focus on "MAG 7"

Tech-heavy Nasdaq index .IXIC closed at an all-time high on Monday, mainly driven by Meta META.O surging 11.3%. Analysts noted its Muse AI assistant was downloaded more than ChatGPT in its first 13 days after launch.

In pre-market trading, Meta edged 0.5% lower, while Alphabet GOOGL.O gained 0.4%, Amazon.com AMZN.O ticked up 0.1%, and Microsoft MSFT.O rose 1.1%. Salesforce CRM.N also advanced 1.6%, leading gains among Dow components.

On the other hand, chip stocks that have benefited most from this year’s AI boom recorded declines: Nvidia NVDA.O dipped 0.2%, while US-listed shares of TSMC TSM.N and SK Hynix SKHY.O both fell about 1%.

“The market received definitive confirmation that Meta’s AI agent commercialization process is progressing as planned, which bolstered market confidence that Meta may finally turn its massive AI investment into consumer-facing products,” noted Akoner.

Federal Reserve policymakers view AI demand and oil shocks as main drivers of inflation. According to CME Group’s FedWatch tool, traders currently expect a 53.1% probability for the Fed to raise rates by at least 25 basis points in October, following a hike this month.

At least three central bank officials are scheduled to speak later in the day, including Federal Reserve Vice Chair Philip Jefferson, New York Fed President John Williams, and Richmond Fed President Thomas Barkin.

Elsewhere, bitcoin BTC= retreated 1% from a seven-month high, dragging down crypto-linked stocks Strategy MSTR.O and Coinbase COIN.O.

(To serve non-native English speakers, Reuters automatically translates its reports into several other languages. As automated translations may contain errors or may not fully convey the intended context, Reuters does not guarantee the accuracy of automated translation texts, and provides them solely for reader convenience. Reuters accepts no responsibility for any damage or loss as a result of using the automated translation function.)