US stock futures advanced on Monday, with the Nasdaq 100 futures gaining 1.09% and S&P 500 futures rising 0.69%. This surge was largely attributed to a strong performance in AI-related stocks and a significant 2% slide in oil prices. The decline in oil prices, with Brent crude falling 2.53% to $96.78 a barrel and WTI crude dropping 3.10% to $93.10 a barrel, helped to pull Treasury yields lower, improving risk appetite among investors.
The positive market sentiment was also fueled by anticipation of a summit between President Donald Trump and Chinese President Xi Jinping later in the week. Treasury Secretary Scott Bessent described preliminary US-China talks on Sunday as "very successful," setting an optimistic tone for discussions expected to cover tariffs, artificial intelligence, and critical minerals. This comes as the existing tariff truce between the two nations is set to expire in November, making trade policy a key focus for financial markets.
AI stocks, which had faced a rout a week prior due to "doomsday calls" from industry bosses, rebounded strongly. Chip companies such as Intel (INTC) rose 5.4%, Marvell (MRVL) added 2.6%, and Dell (DELL) advanced 2.7%. Meta (META) climbed 2.4%, and Accenture (ACN) gained 6% following its announcement of a $2 billion investment in AI evaluation in partnership with Anthropic. This indicates a renewed investor focus on continued spending in AI development.
Despite ongoing threats between Iran and the US over the weekend, signs that warring parties in the Middle East were open to a resolution contributed to lower oil prices and improved market sentiment. President Trump's openness to meeting Iranian President Masoud Pezeshkian also played a role. However, the U.S. 10-year Treasury yield, which ended Friday at 4.998%, continues to pose a challenge, as high yields can increase the return investors demand from growth stocks. Europe also saw a rebound, with the STOXX Europe 600 gaining 1.08%.
