US stock index futures climbed on Friday, driven by enthusiasm for artificial intelligence despite earlier concerns over elevated oil prices and rising Treasury yields. Chip stocks like Advanced Micro Devices, Marvell, Cerebras, and Intel each gained 2% in premarket trading. Megacaps such as Tesla, Nvidia, and SpaceX also saw marginal increases. Akamai Technologies surged 21% after securing an $11.6 billion cloud services deal with Anthropic PBC.
The global bond sell-off that had pushed yields to multi-decade highs began to stabilize. The 10-year Treasury yield eased one basis point to 5.19%, after increasing more than 20 basis points in the preceding two sessions. The rate-sensitive two-year yield also declined two basis points to 4.91%. This stabilization offered investors a respite from a challenging period in debt markets.
Oil prices dropped, providing further support to market sentiment. Brent crude fell 0.9% to approximately $105.60 a barrel, snapping a two-day surge of over 7%. The decline was attributed to reports that US and Iranian negotiators were exploring a phased deal to reopen the Strait of Hormuz, a key waterway for global oil transport. A credible agreement could potentially push Brent prices below $100 per barrel, according to analyst Haris Khurshid of Karobaar Capital LP.
As a result of these factors, US equity-index futures pared earlier losses and Asian stocks advanced, with MSCI's Asia Pacific equities gauge climbing 0.3%. Japan led the gains, while markets in South Korea, Taiwan, and mainland China were closed for a holiday. The market is now looking for a more sustained period of stability in yields before becoming more constructive on duration, as noted by Rajeev De Mello, a global macro portfolio manager at Gama Asset Management.
