US STOCKS-S&P 500, Dow on course for slim gains at open as Iran tensions clash with AI optimism

‌The ​benchmark S&P 500 and the blue-chip Dow indexes looked set for modest gains at the open on Wednesday, as investors weighed renewed U.S.-Iran clashes against signs of strength in the AI trade. The latest strikes have pushed geopolitical tensions ‌front and center, ending the uneasy calm of the past few weeks and reviving inflation concerns.

But the AI growth engine has helped sentiment, and investors are betting that a modest dose of macroeconomic uncertainty would not be enough to derail the tech trade. "When it comes to AI, we're just at the precipice. We are at the ‌beginning of what is a very significant revolution in the way technology and data is managed," said Thomas Kikis, head of markets, U.S. and the ‌Americas, at Standard Chartered.

At 8:31 a.m. ET, Dow E-minis were up 122 points, or 0.23%, S&P 500 E-minis rose 5.75 points, or 0.08%, and Nasdaq 100 E-minis lost 26.75 points, or 0.09%. Major movers in the premarket session included Dell , which gained 8.94% after raising its annual profit and revenue forecast. Hewlett Packard Enterprise also rose 4.5% after Dell's upbeat outlook boosted sentiment around ⁠AI infrastructure spending.

Nvidia ​rose 0.33%, while Apple and Tesla rose ⁠0.47% and 0.47%, respectively. BOND YIELDS COULD PRESSURE STOCKS

Equities have been under pressure from elevated yields on risk-free U.S. Treasuries, which reduce the appeal of taking on the added risk of buying stocks. The ⁠10-year Treasury yield fell 2 basis points on Wednesday after rising earlier in the session, but is still close to its highest since January last year.

"Investors are very concerned ​about the upward trend in global bond yields and as a result, are lightening their exposure to equities where they have substantial profits," said Sam ⁠Stovall, chief investment strategist at CFRA Research. Any flare-up in the Middle East could also complicate the interest-rate outlook further. Over the past week, traders have sharply increased bets on a September rate hike ⁠after ​Federal Reserve Chair Kevin Warsh said taming price pressures is the central bank's chief focus.

Markets are now pricing in a 66% chance of a hike in September, according to the CME FedWatch tool, compared with about 37% a week ago. Investors are contending with seasonal weakness too. Since 1926, the benchmark S&P 500 ⁠has lost 0.7% on average in September, making it the weakest month for stocks and the only one with a negative average return, according to Fisher Investments, ⁠which cited data from Finaeon.

Energy stocks, ⁠which have been among the few gainers in recent sessions, dipped marginally as Brent crude erased gains from earlier in the session. Chevron and Valero Energy each edged 0.58% lower. Investors will also parse the jobs report on Friday, which could ‌help set the tone for ‌equities. Recent inflation data has offered mixed cues.