By Ragini Mathur and Utkarsh Hathi
May 18 (Reuters) – U.S. stock indexes were on track for a higher open on Monday as heavyweight semiconductor stocks recovered, while a bond market rout that had sparked a selloff the previous week appeared to cool.
The 10-year Treasury yield, the benchmark for global borrowing costs, fell to 4.573%, having climbed as much as 4.631% to its highest level since February 2025 earlier in the session. [US/]
Oil prices also retreated, with Brent crude falling almost 2% after reports said the United States had proposed a temporary waiver on Iranian oil sanctions, easing some concerns over supply disruptions. [O/R]
“Futures have come back a little bit because there are some unconfirmed reports that the U.S. will allow some Iranian oil to be sold,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“Yields are key to all of this because growth stocks, especially AI-related companies, are priced on forward-looking earnings. When yields move higher, their current valuations come down. That’s really the key issue for the market.”
The bond-market selloff was fueled by a surge in oil prices, which has stoked concerns of inflation potentially keeping borrowing costs elevated as efforts to end the Iran war appeared to stall.
At 08:51 a.m. ET, Dow E-minis rose 45 points, or 0.09%, S&P 500 E-minis were up 16 points, or 0.22%, and Nasdaq 100 E-minis gained 148.25 points, or 0.51%.
Wall Street had rallied sharply in recent weeks, with the benchmark S&P 500 and the tech-heavy Nasdaq reaching record highs as enthusiasm around artificial intelligence helped investors look past the inflationary threat from soaring oil prices.
Traders are now pricing in a more than 40% chance the U.S. Federal Reserve will raise interest rates in January, according to CME’s FedWatch tool, after last week’s hotter-than-expected inflation readings.
However, Nvidia’s shares , jumped 2.1% in premarket trading on Monday. The world’s most valuable company is scheduled to report results on Wednesday.
Expectations are high for Nvidia, whose shares have risen 36% from a March low, while the Philadelphia SE Semiconductor Index has surged more than 60% this year on strong demand for AI-related chips.
Among other gainers, Micron Technology rose 4% and Intel added 3.7%.
Walmart, the largest retailer in the world, is also expected to report earnings this week, which could offer a clearer picture of how U.S. consumers are coping with higher energy prices and broader inflation pressures.
