Equity futures point to a slightly higher opening this morning after recovering from overnight losses, looking to build on yesterday's robust advance that saw the major averages rally behind renewed strength in AI and semiconductor stocks and a favorable move in oil prices and Treasury yields.

The turnaround coincided with a Reuters report that Iran is prepared to reopen the Strait of Hormuz within seven days if the U.S. eases military pressure and lifts its blockade on Iranian ports. A senior Iranian official also said the country's delegation at the United Nations General Assembly has authority to pursue renewed diplomacy with the U.S. Iran's President Masoud Pezeshkian is attending this week's UN gathering, while President Trump is scheduled to address the General Assembly this morning as developments surrounding the conflict remain in focus.

U.S.-China relations are another focal point after Bloomberg reported that officials discussed artificial intelligence, investment, and trade during the second day of talks in New York ahead of this week's meeting between President Trump and Chinese President Xi Jinping.

The combination of renewed diplomatic hopes surrounding Iran, another retreat in oil and Treasury yields, and continued dialogue between the U.S. and China has helped equity futures recover from their overnight weakness and point modestly higher ahead of the opening bell.

In corporate news:

• Republicans pressuring President Trump to restrict exports of diesel, according to Politico. 
• Alibaba (BABA 119.07, +3.31, +2.86%) introduced a new proprietary AI chip as investors assessed high-level U.S.-China talks ahead of this week's summit.
• Novo Nordisk (NVO 39.35,-0.45, -1.1%) CEO Mike Doustdar says company is considering M&A opportunities, according to CNBC.
• On Holding (ONON 29.02, +1.70, +6.22%) set 2029 targets that include high-teens constant-currency sales growth, gross margin of at least 65%, and adjusted EBITDA margin of at least 22%. The company also authorized an inaugural share repurchase of up to $1 billion and reaffirmed its fiscal 2026 outlook.

Reviewing overnight developments:

Nikkei reports that Asia-Pacific equities finished mixed, with Chinese markets little changed, Hong Kong extending its winning streak, and Japan closed for a public holiday.

In news:

• Hong Kong saw renewed strength in AI and semiconductor shares.
• Alibaba (BABA 119.07, +3.31, +2.86%) introduced a new proprietary AI chip as investors assessed high-level U.S.-China talks ahead of this week's summit.

In economic data:

• There was no economic data of note

Equity Markets

• Japan's Nikkei: closed for holiday
• Hong Kong's Hang Seng: +0.2%
• China's Shanghai Composite: +0.1%
• India's Sensex: -0.4%
• South Korea's Kospi: +0.1%
• Australia's All Ordinaries: +0.4%

Major European indices are mostly higher as investors monitor lower oil prices and a diplomatic calendar centered on the UN General Assembly and the U.S.-China summit.

In news:

• The UN General Assembly and this week's U.S.-China summit remain in focus.

In economic data:

• U.K.'s September CBI Industrial Trends Orders -9 (expected -33; prior -25)
• Spain's July Trade Balance -EUR5.22 bln (prior -EUR7.69 bln)

Equity Markets

• STOXX Europe 600: +0.5%
• Germany's DAX: +0.5%
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: +0.6%
• Italy's FTSE MIB: -0.2%
• Spain's IBEX 35: +0.8%

[BRIEFING.COM] The major averages opened the week with robust gains on Monday, powered by a resurgence in semiconductor and mega-cap stocks alongside meaningful relief from two of the market's recent macro headwinds. The S&P 500 (+1.5%) and Nasdaq Composite (+2.3%) finished near their best levels of the session, while the DJIA (+0.7%) also posted a solid advance.

Technology stocks were at the center of the rally throughout the session. The PHLX Semiconductor Index surged 4.3%, helping the information technology sector (+2.5%) finish among the strongest groups. Advanced Micro Devices (AMD 615.52, +55.70, +9.95%) and Intel (INTC 121.78, +13.18, +12.14%) were two of the best-performing S&P 500 components despite the absence of company-specific catalysts, reflecting renewed momentum across the semiconductor space. AMD reached a new all-time high and crossed $600 per share for the first time, lifting its market capitalization above $1 trillion.

The strength represented a sharp change in tone following recent volatility surrounding AI stocks and debate over whether development of increasingly capable models should be slowed. NVIDIA (NVDA 227.38, +5.11, +2.30%) CEO Jensen Huang pushed back against AI safety concerns in a weekend interview, saying there is a "0% chance" AI ends the world by 2030 and arguing in favor of continued development. President Trump similarly reiterated his support for continued AI development. That backdrop was also complemented by preliminary U.S.-China discussions ahead of this week's meeting between President Trump and Chinese President Xi Jinping. The talks were characterized as successful and established a formal dialogue around AI, with Reuters reporting that the two sides are expected to meet again in two months to discuss AI safety. For now, the absence of an agreement to slow development provided another supportive element for the AI trade and today's semiconductor rally.

Mega-cap strength was equally pronounced, leaving the Vanguard Mega Cap Growth ETF up 2.7%. The communication services sector (+3.9%) topped the sector standings as Meta Platforms (META 741.24, +75.50, +11.34%) surged double-digits, extending its September gain beyond 30%. Enthusiasm surrounding the company's AI efforts remained a major driver, particularly after its Muse AI agent climbed to the top spot among free downloads on Apple's App Store.

The consumer discretionary sector (+1.5%) also outperformed amid the broader strength in growth stocks. The rally nevertheless extended well beyond the largest technology companies. Seven S&P 500 sectors finished higher, including a 1.1% gain in the real estate sector, as the simultaneous retreat in crude oil and Treasury yields provided a more favorable backdrop across the broader market.

Crude oil recorded a particularly sharp decline, with WTI settling $4.47 lower (-4.5%) at $95.77 per barrel. Optimism surrounding the potential for diplomatic progress between the U.S. and Iran at this week's United Nations gathering contributed to the decline, as President Trump has indicated he is open to meeting Iranian President Masoud Pezeshkian.

The energy sector (-2.5%) consequently finished at the bottom of the standings, with Chevron (CVX 203.78, -5.73, -2.73%) weighing on the DJIA.

The utilities (-0.4%) and consumer staples (-0.4%) sectors also finished lower as defensive areas generally lagged the growth-led rally. The health care sector bucked that defensive trend, supported by a surge in Moderna (MRNA 172.94, +18.90, +12.27%) to multi-year highs.

Corporate and speculative pockets of the market provided additional support. Warner Bros. Discovery (WBD 30.80, +3.00, +10.79%) and Paramount Skydance (PSKY 9.91, -0.30, -2.94%) surged after Bloomberg reported that Paramount Skydance reached a settlement with California and other states that had sought to block its acquisition of Warner Bros. Discovery, removing a legal obstacle to the transaction.

Crypto-related stocks also rallied as Bitcoin climbed above $86,000 to its highest level since January, boosting Coinbase Global (COIN 201.05, +6.80, +3.50%), Robinhood Markets (HOOD 123.30, +3.48, +2.90%), and Strategy Inc (MSTR 168.50, +14.58, +9.47%).

Monday's session ultimately combined renewed enthusiasm for AI and semiconductor stocks with a notably more accommodating macro backdrop. The 4.3% surge in the PHLX Semiconductor Index and pronounced mega-cap strength propelled the Nasdaq to a 2.3% gain, while lower crude oil and Treasury yields helped broaden participation beyond technology. With AI development remaining firmly in focus and diplomatic developments contributing to relief in oil and rates, several of the pressures responsible for recent market volatility moved in the opposite direction to start the week.

U.S. Treasuries performed well overnight, as oil prices moved lower, but there was no follow-through in the cash session. The 2-year note yield settled up one basis point to 4.75%, and the 10-year note yield settled donw four basis points to 4.96%. 

There was no economic data of note.

• Nasdaq Composite: +16.7% YTD
• Russell 2000: +15.9% YTD
• S&P 500: +13.4%
• S&P Mid Cap 400: +10.9% YTD
• DJIA: +8.3% YTD