By Johann M Cherian and Tharuniyaa Lakshmi
Sep 21 (Reuters) - US stock futures were higher on Monday, driven by gains in AI shares as Treasury yields took a beating and oil slid 2% to hit an 11-day low on signs of progress in Middle East talks.
While Washington and Tehran continued to exchange new threats through the weekend, US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected in New York this week for the UN General Assembly.
Doomsday calls
from bosses at top AI companies a week ago had sparked a rout, but those concerns seemed to dissipate on Monday as investors focused on indications spending on developing the technology was still expanding.
Chip companies such as Intel rose 5.3%. Marvell added 2.2%, Meta climbed 2.6% and Dell advanced 2.3%. Accenture also gained and was up 6.1% after partnering with Anthropic to invest $2 billion in AI evaluation.
"We are past the local peak in (Middle East) tensions, and we should see some move towards normalization in the coming weeks. Our theory remains that the first couple of weeks of October could be a sweet spot for some sort of fudge between (the) US and Iran," said Mohit Kumar, an economist at Jefferies.
A fall in oil prices eased the pressure on equities as the 10-year US bond yield slipped below the keenly watched 5% mark. Energy-price-sensitive airlines such as Delta and American gained more than 1.5% each.
Still, investors are wary of the interest-rate outlook after a recent pickup in inflation prompted the US Federal Reserve to raise rates for the first time in three years. Markets see a 53% chance of another rate hike next month, CME's FedWatch showed.
Commentary from at least 10 central bank policymakers is due this week.
Chicago Fed President Austan Goolsbee said there was "no ambiguity" about the need for higher interest rates, with inflation pressures now moving beyond tariffs and energy prices to strong demand.
At 07:09 a.m. ET, Dow E-minis rose 404 points, or 0.78%, S&P 500 E-minis gained 51.25 points, or 0.67%, and Nasdaq 100 E-minis added 310.75 points, or 1.04%.
A diplomatic breakthrough between the United States and Denmark over the weekend regarding the status of Greenland also aided sentiment and will likely allay trade tensions between the countries.
US-listed shares of companies exposed to Greenland advanced. Critical Metals soared 27.1%, Greenland Mines shot up 90.8% and Greenland Energy more than doubled.
The China-US summit on Thursday could likely touch on topics including potentially extending the trade truce between the two superpowers, the Iran war as well as regulation on AI advancement.
Scott Bessent and Chinese Vice Premier He Lifeng concluded talks on Sunday during which the US Treasury secretary proposed a new mechanism for AI safety notifications.
Bitcoin, a key marker of risk appetite, rose 4.3% to hit a more-than-seven-month high, lifting Coinbase and Strategy over 5% each.
Warner Bros was up 7.1% after a report Paramount discussed concessions in advanced settlement negotiations with California's attorney general that could help close the proposed merger between the two companies.
(Reporing by Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru; Editing by Mrigank Dhaniwala and Pooja Desai)
