U.S. stock index futures advanced on Monday as investors tracked renewed diplomatic efforts between Washington and Tehran while bracing for a fresh wave of corporate earnings results.
By 02:00 ET, Dow Jones futures had risen 277 points, or 0.5%, S&P 500 futures were up 44 points, or 0.6%, and Nasdaq 100 futures had gained 239 points, or 0.8%.
Friday’s session on Wall Street was driven higher by technology stocks, with stronger-than-expected earnings from Amazon (NASDAQ: AMZN) helping restore confidence in the artificial intelligence sector.
Amazon’s strongest quarterly revenue growth in more than four years, combined with robust results from Microsoft (NASDAQ: MSFT), helped offset investor disappointment following recent earnings from Apple (NASDAQ: AAPL) and Meta Platforms (NASDAQ: META).
The Philadelphia Semiconductor Index edged 0.07% higher during the previous session, though it remains more than 20% below the record closing high it reached in June.
John Higgins, Chief Economic Advisor at Capital Economics, noted that investor confidence in artificial intelligence has weakened in recent months even as underlying demand for the technology remains resilient.
“That may help to explain the rebound [late last week] in the share prices of some of the behemoths at the heart of the AI revolution,” Higgins wrote.
Investor attention shifted back to the Middle East after President Donald Trump announced that a planned military strike on Iran had been cancelled in favour of renewed diplomatic negotiations.
Trump said the United States was engaging with Iran “in the form of negotiations… it starts tomorrow afternoon and we’ll see if it’s true,” signalling a potential shift in regional tensions.
He also indicated that a framework for an agreement to reopen the Strait of Hormuz had been established following discussions involving Iran and several Middle Eastern countries.
Analysts cautioned that earlier diplomatic efforts had broken down within weeks of implementation, with researchers at Vital Knowledge noting the fragility of previous ceasefire agreements in the region.
Brent crude fell 5.1% to $83.44 per barrel following the diplomatic developments, as eased supply disruption fears weighed heavily on oil markets.
Additional downward pressure on crude came after OPEC+ agreed to increase production by approximately 188,000 barrels per day, completing the reversal of production cuts introduced in 2023.
Investors are also awaiting the latest U.S. manufacturing data from the Institute for Supply Management, with economists expecting the July index to rise to 54.0 from 53.3 in June.
Manufacturing growth has now continued for six consecutive months, supported by ongoing investment in artificial intelligence infrastructure despite persistent geopolitical uncertainty across key global markets.
Later in the session, Palantir Technologies (NASDAQ: PLTR) is scheduled to report second-quarter earnings after the closing bell, drawing significant attention from both institutional and retail investors.
The data analytics company reported record first-quarter revenue of $1.63 billion, an increase of 85% compared with the previous year, driven by strong demand across government and commercial customers.
Palantir’s Maven AI platform continues to play a central role in U.S. defence operations, while management has forecast fiscal 2026 revenue of between $7.65 billion and $7.66 billion.
Despite its commercial momentum, analysts are monitoring increasing competition from emerging AI companies such as Anthropic, with Palantir executives earlier this year referring to rival products as “AI slop.”
Shares of Palantir have fallen more than 26% since the beginning of the year, making the earnings release a closely watched test of investor confidence in the company’s longer-term growth trajectory.
