US futures dip as Iran talks temper AI rally; HPE surges on record earnings
US stock futures slipped from record highs as investors weighed geopolitical uncertainty against artificial intelligence developments, with Hewlett Packard Enterprise leading gains while Alphabet weighed capital expenditure plans.
US stock futures declined from record highs on Tuesday as investors balanced optimism surrounding artificial intelligence developments against geopolitical uncertainties involving US-Iran negotiations. Futures attached to the Dow Jones Industrial Average fell 0.4%, the S&P 500 dropped 0.2%, and the Nasdaq 100 edged slightly lower. The pullback followed a period of record highs, with sentiment shifting as prospects for a Middle East peace deal remained in focus.
Hewlett Packard Enterprise shares rose more than 20% after reporting record second-quarter earnings driven by expansion in AI data centres. Chief Executive Antonio Neri noted that traditional server orders increased by triple digits as customers modernised their compute infrastructure. The company raised its full-year outlook and accelerated its long-term financial goals by two years, forecasting strong demand for servers well into 2027.
In contrast, Alphabet stock dipped after the company announced plans to raise $80 billion to fund its AI infrastructure plans. The divergence in performance highlights the concentrated nature of the current market rally. A Goldman Sachs analysis indicates that the S&P 500’s recent gains are heavily concentrated in AI enablers, with an index excluding these stocks slightly lower since late February, while the broader index is up about 10%.
Oil prices eased, with Brent crude falling 1% to $93 a barrel and West Texas Intermediate crude dropping to $91 a barrel. The decline followed reports that US President Donald Trump stated negotiations with Iran were continuing at a rapid pace. Trump indicated in a telephone conversation with ABC News that a memorandum of understanding to reopen the Strait of Hormuz could occur within a week, although the US still needed to resolve a few remaining points.
Investors are awaiting the Job Openings and Labor Turnover Survey report to gauge economic strain, with the May jobs report scheduled for Friday. The data is closely watched for signs of economic pressure that could complicate the Federal Reserve’s interest rate decisions. Earnings season continues to wind down, with Palo Alto Networks, Dollar General, Ulta Beauty, and Victoria’s Secret scheduled to report results on Tuesday.
