Nasdaq Recovers: Chip Stocks Rebound Amid Geopolitical Fears

US stock futures edged higher on Monday as chip stocks showed signs of recovery following a substantial plunge on Friday. Major players like NVIDIA, Broadcom, and Micron Technology saw their shares climb, indicating a potential stabilization after a sell-off that erased nearly $1 trillion in market value for US-listed chipmakers. This rebound suggests that while the AI trade remains robust, some market segments may have experienced overly optimistic valuations.

However, the market faces headwinds from geopolitical developments in the Middle East and anticipations of continued tighter monetary policy. Renewed hostilities between Iran and Israel caused oil prices and Treasury yields to climb, sparking concerns about prolonged conflict and its inflationary impact. Despite this, President Trump's comments suggesting a desire for a ceasefire helped to moderate oil price increases from their session highs.

Attention is now focused on upcoming inflation data, including the CPI and PPI reports, which will precede the next Federal Open Market Committee (FOMC) meeting. Stronger-than-expected inflation figures could reinforce the likelihood of interest rates remaining elevated for an extended period. Marvell Technology's stock surged nearly 9% after its inclusion in the S&P 500 was announced, further highlighting activity within the semiconductor sector.

Technically, the Nasdaq 100 found support after pulling back from record highs, with key levels to watch for further recovery or potential declines. Meanwhile, in currency markets, the US dollar eased against a rising EUR/USD and GBP/USD, partly due to a weaker dollar offsetting disappointing German economic data and ongoing uncertainty surrounding interest rate expectations.