Wall Street futures traded near the flatline on Tuesday after artificial intelligence stocks powered strong gains in the previous session. Investors also watched oil prices, Treasury yields and possible talks between the United States and Iran.

Dow Jones Industrial Average futures rose 111 points, or 0.21%, at 7:12 a.m. ET. S&P 500 futures gained 0.03%, while NASDAQ 100 futures added 0.05%. The limited movement followed Monday’s broad market rally.

Oil Prices Fall on Hopes of US-Iran Talks

Brent crude fell about 1.6% and traded below USD 100 per barrel. West Texas Intermediate also declined as traders assessed reports that Iran could reopen the Strait of Hormuz within seven days. A senior Iranian official said Tehran may take that step if Washington reduces military pressure and lifts its blockade.

The Strait of Hormuz remains a key route for global oil shipments. Any increase in traffic through the waterway could ease supply concerns that have kept crude prices elevated during the six-month conflict. Saudi Arabia has also restarted operations at its East-West Pipeline, according to Reuters.

Investors now await possible US-Iran talks on the sidelines of the United Nations General Assembly meeting this week. Market participants hope the discussions could reduce tensions and restore more stable energy flows from the Middle East.

However, traders remain cautious because the diplomatic plans have not produced a formal agreement. Oil prices and US stock futures could remain sensitive to new statements from Washington and Tehran.

AI Stocks Pause After NASDAQ Reaches Record High

The NASDAQ Composite closed at a record high on Monday after gaining 2.3%. Meanwhile, the S&P 500 advanced 1.5% for its strongest session since August 4, while the Dow rose 366 points, or 0.7%.

Meta shares jumped 11.3% after its Muse AI agent recorded more downloads during its first 13 days than ChatGPT. The performance lifted other technology and AI-linked stocks during the session.

“Muse provides early evidence that consumer AI agents could achieve broad adoption, offering new AI monetization opportunities beyond enterprise application,” UBS analysts said.

Technology stocks showed mixed moves before Tuesday’s opening bell. Meta slipped 0.5%, while Alphabet gained 0.6%. Amazon rose 0.4%, and Microsoft added 0.8%. NVIDIA declined 0.1%, while US-listed shares of TSMC and SK Hynix fell about 1% each.

Also Read: AI Rally Pushes NASDAQ to Record High, AMD Hits USD 1 Trillion

Treasury Yields and Fed Rate Outlook Remain in Focus

The benchmark 10-year Treasury yield traded near 4.9%, a level that has influenced equity markets in recent sessions. Higher yields can raise borrowing costs for companies and reduce the appeal of stocks compared with government bonds.

Investors also monitored the Federal Reserve’s interest-rate outlook after the central bank raised rates by 25 basis points this month. Traders assigned a 50.9% probability that the Fed would increase rates by at least another quarter-point in October, according to the CME FedWatch Tool.

Federal Reserve officials continue to assess how higher oil prices and AI-related demand may affect inflation. Markets will watch speeches from Fed Vice Chair Philip Jefferson, New York Fed President John Williams and Richmond Fed President Thomas Barkin later on Tuesday.

The Richmond Fed manufacturing survey will also provide new information about factory activity. However, this week’s diplomatic meetings and energy-market developments may remain the leading drivers for US stocks.

Trump-Xi Summit Adds Another Market Catalyst

President Donald Trump is scheduled to meet Chinese President Xi Jinping in Washington on Thursday. The leaders are expected to discuss trade, artificial intelligence, tariffs, rare earth metals, and the conflict involving Iran.

US and Chinese officials held preliminary talks before the summit. Treasury Secretary Scott Bessent described those discussions as ‘very successful,’ which supported hopes that both countries may extend their trade truce.

UBS analysts said clearer communication between Washington and Beijing could reduce near-term political uncertainty. They added that a summit that improves predictability could support business confidence and lower the risk of a sudden escalation.

Elsewhere, Bitcoin fell about 1.1% after reaching a seven-month high. The pullback pushed shares of Coinbase and Strategy lower in premarket trading. Bitcoin traded near USD 86,000 after its sharp rise during Monday’s broader risk-asset rally.

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