S&P 500, Nasdaq Futures Barely Blink After Trump's Iran 'Surrender' Ultimatum Because 'AI Is All That Matters Right Now' — MU, RDW, MNTS, ZS In Focus

• Meanwhile, gains in Micron Technology and other memory chip stocks pushed broader markets higher on Tuesday.
• Oil futures were down overnight heading into Wednesday, trading below $100 a barrel. 
• Asian markets were mixed early Wednesday, even as Japan and South Korea’s benchmark indices hit new highs.

U.S. stock futures edged higher in the overnight trading session heading into Wednesday as tech-driven gains eclipsed concerns over the ongoing conflict in the Middle East.

Nasdaq 100 futures climbed 0.23%, the S&P 500 futures were 0.12% higher, and the Dow futures were up 0.07% as of 9.34 p.m ET.  

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ) and SPDR Dow Jones Industrial Average ETF Trust (DIA) all traded in the green at the time of writing, with retail sentiment in the ‘bullish’ territory for SPY, in the ‘neutral’ territory for QQQ, and in the ‘bearish’ territory for DIA.

The iShares 20+ Year Treasury Bond ETF (TLT) was also up about 0.20% amid ‘bullish’ sentiment.

How Did US Markets Fare On Tuesday?

On Tuesday, U.S. benchmark indexes closed mixed. The Dow Jones index shed 118 points to close 0.23% lower. The S&P 500 closed up 0.61%, while the Nasdaq Composite added more than 300 points to end the session 1.19% higher.

U.S. markets were closed on Monday in observance of Memorial Day.

US Market Drivers

U.S. markets have been closely tracking updates on the Middle East conflict, now in its 13th week. On Monday, hopes for a peace deal between the U.S. and Iran were on the cards after President Donald Trump said that talks with Iran were “proceeding nicely.”

However, the president has escalated warnings since then, asking Iran to admit defeat. “If Iran surrenders, admits their Navy is gone and resting at the bottom of the sea, and their Air Force is no longer with us, and if their entire Military walks out of Tehran, weapons dropped and hands held high, each shouting ‘I surrender, I surrender’ while wildly waving the representative White Flag, and if their entire remaining Leadership signs all necessary ‘Documents of Surrender,’ and admit their defeat to the great power and force of the magnificent U.S.A., The Failing New York Times, The China Street Journal (WSJ!), Corrupt and now Irrelevant CNN, and all other members of the Fake News Media, will headline that Iran had a Masterful and Brilliant Victory over The United States of America, it wasn’t even close. The Dumacrats and Media have totally lost their way. They have gone absolutely CRAZY!!!” he said in a post on Truth Social.

The U.S. Secretary of State, Rubio, had said earlier that “specific language” for a deal to end the war in the Middle East was under negotiation in Qatar and would likely “take a few days.”

Early Tuesday, the U.S. military conducted “self-defense” strikes in southern Iran to dismantle its attempt to place mines. Iran has said that the U.S. violated a ceasefire, potentially complicating peace deal efforts.

Meanwhile, gains in Micron Technology (MU) and other memory chip stocks pushed the market higher. MU stock closed up more than 19% on Tuesday and crossed $1 trillion in market capitalization amid optimism on Wall Street.

The Kobeissi Letter said in a post on X that the S&P 500's net profit margin, excluding financials, has climbed to a record, even as net margins, excluding the “Magnificent 7” and technology stocks, are nearing their lowest since the 2020 pandemic. “AI is all that matters right now,” the market commentary service said.

Meanwhile, BlackRock, in its latest weekly commentary, highlighted that against the backdrop of the war in Iran and the accelerating AI buildout, investors need to look beyond traditional diversification. “Traditional portfolio diversification is challenged today, underscoring the need for broader diversification sources. We stay pro-risk on solid corporate earnings and the AI theme,” the firm said.

On the economic front, markets will be watching for first-quarter gross domestic product (GDP) data, inflation data, and consumer health.

Trending Stocks To Watch

Micron Technology (MU): Shares of the memory chip stock continued to climb in the overnight session, adding more than 6% after closing up 19.29% on Tuesday, after UBS raised the firm's price target on to $1,625 from $535 and kept a ‘Buy’ rating on the shares, citing long-term benefit from memory supply agreements.

Redwire Corp. (RDW): The aerospace and defense company rallied 26% and continued to climb overnight after it announced new military drone contracts and progress on a European lunar robotics initiative. The company also got a boost from broader sectoral interest, sparked by anticipation for SpaceX's massive initial public offering.

Momentus Inc. (MNTS): The San Jose, California-based space company more than doubled due to optimism from an insider purchase by former astronaut and company director Chris Hadfield, as well as a spillover of excitement from SpaceX’s upcoming listing.

Zscaler Inc. (ZS): The cloud cybersecurity company jumped onto the retail radar after it posted third-quarter earnings results. Shares of the company plummeted 21% in post-market hours as the revenue outlook for the upcoming quarter fell short of expectations.

Global Market Trends

Oil futures were declining overnight heading into Wednesday, trading below $100 a barrel. Brent crude futures expiring in July were down about 0.74%, trading at around $98.84 a barrel, while WTI crude futures expiring in June were down more than 1%, trading around $98.84 a barrel at the time of writing.

Yields on the 10-year Treasury were at 4.479%, while gold prices climbed to around $4,512.06 an ounce.

Asian markets were mixed early Wednesday, even as Japan and South Korea’s benchmark indices hit new highs. The KOSPI was up nearly 4% at the time of writing, while the Nikkei 225 climbed more than 1.6%. The SSE Composite index and Australian stocks were lower at the open.

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