May 27 (Reuters) - U.S. stock index futures extended gains on Wednesday, helped by sustained AI-driven momentum, while investors were cautiously optimistic that the U.S. and Iran would reach a deal.
A fragile truce between Tehran and Washington remained in place despite recent U.S. strikes near the Strait of Hormuz, which Iran called a "gross violation" of the ceasefire agreement.
"The evolving situation in the Middle East and still-elevated bond yields may put the global stock rally to the test. Bouts
of market volatility remain likely, as investors react to fresh headlines," UBS analysts said.
"But we also think strong earnings should support further gains for equities over the medium term, and we see attractive opportunities across regions."
At 04:42 a.m. ET, Dow E-minis were up 195 points, or 0.39%, S&P 500 E-minis were up 21 points, or 0.28%, and Nasdaq 100 E-minis were up 134 points, or 0.45%.
Both the S&P 500 and the Nasdaq closed at record highs on Tuesday, driven by renewed confidence around AI, as Micron surpassed $1 trillion in market value for the first time.
Shares of the memory chipmaker gained 4.6% in premarket trading. Peers Sandisk, Western Digital and Seagate Technology were up over 1.3% each.
A strong earnings season and expectations of about 29% year-on-year growth in the first quarter have aided the rally on Wall Street, with the blue-chip Dow Jones becoming the last major index to hit a record high on Friday.
Goldman Sachs raised its 2026 year-end forecast for the S&P 500 to 8,000 from 7,600, citing continued strength in corporate earnings.
Markets will next look toward the personal consumption expenditures (PCE) index data on Thursday. The Federal Reserve's key inflation measure could provide fresh clues on the monetary policy path forward under new chair Kevin Warsh.
Money markets currently expect the Fed to keep rates steady for the rest of the year, with some pricing in a 25 bps hike in December.
Among early movers, shares of Zscaler tumbled 21.5% after the cloud security firm projected fourth-quarter revenue below expectations.
GlobalFoundries shares fell 6.6% after Bloomberg News reported majority owner Mubadala Investment Company was seeking to raise $1.91 billion from an unregistered block sale of GFS shares.
(Reporting by Twesha Dikshit; Editing by Shinjini Ganguli)
