By Johann M Cherian and Avinash P
Sept 25 (Reuters) - Wall Street's main stock indexes were set to open higher on Friday as AI optimism offset worries regarding high oil prices and rising Treasury yields, while investors monitored chances of an agreement to end the Middle East conflict.
Chip stocks Advanced Micro Devices, Marvell and Cerebras rose more than 1% each to lead premarket gains. Megacaps Tesla, Nvidia and SpaceX also edged up.
Akamai Technologies surged 12% after an $11.6 billion cloud services
deal with AI leader Anthropic.
AI-related optimism was driven this week by traction among young consumers for Meta's Muse application and its integrated device, Charm.
Meta shares were set for a fifth straight week of gains — their biggest five-week advance since late January 2023 — putting the social media giant less than 1% away from the $2 trillion market value mark. The stock dipped 1% premarket.
"The amount of money being deployed into the economy from AI investment is just so strong, and we haven't even seen the productivity piece of it," said Jamie Harris, managing partner at Harris Financial Group. "There's a little bit of that the market is weighing into the valuation and that's one of the reasons why you really can't get much of a selloff."
At 8:39 a.m. ET, Dow E-minis were up 140 points, or 0.27%, and S&P 500 E-minis were up 21.25 points, or 0.27%. Nasdaq 100 E-minis were up 142.25 points, or 0.46%.
Communication services, which includes Meta, and tech led weekly gains among S&P 500 sectors. The benchmark index and the tech-heavy Nasdaq were set for weekly advances.
A report that US and Iranian negotiators continued to explore a phased path out of the war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade, helped market sentiment.
Optimism, however, was capped by inflation worries driven by prolonged Iran and Ukraine conflicts and soaring government debt. Brent crude prices hovered over $100 a barrel and the yield on the 10-year Treasury note was at 5.1%.
Reflecting a stronger-than-expected economy, durable goods orders were flat in August, compared with economists' expectations for a 0.4% fall.
Traders now see a 69% chance that the Federal Reserve will increase interest rates by at least 25 basis points in October, up from around 50% earlier this week, the CME Group's FedWatch Tool showed.
Policymakers, including New York Fed President John Williams, Kansas City Fed President Jeffrey Schmid and Cleveland Fed President Beth Hammack, are likely to echo their restrictive stance on monetary policy when they speak later in the day.
The US-China summit, which has been closely followed, did not offer any sign of a major breakthrough between the superpowers, other than the extension of their trade truce until January 10.
Among other movers, People jumped 10% after a report said MGM Resorts International was discussing a bid for the online services company. Comcast slipped 2.1% after KeyBanc downgraded the media and telecommunications firm to underweight.
(Reporting by Johann M Cherian in Bengaluru and Avinash P; Editing by Arun Koyyur and Joyjeet Das)
