June 18 - U.S. stock index futures recovered on Friday after a selloff in the previous session, driven in part by renewed optimism over an interim agreement between the United States and Iran and a sharp premarket rise in Intel shares.
Intel climbed 9.3% in premarket trading after U.S. President Donald Trump said Apple had agreed to collaborate with the chipmaker to design and manufacture its chips in the U.S. Other technology names also moved higher, with Nvidia up about 1% and both Micron and Marvell Technology adding roughly 4% each.
All three benchmark indexes had dropped on Thursday as investors priced in the possibility of Fed rate hikes following remarks from new Chair Kevin Warsh emphasizing the need to rein in inflation, alongside projections from other policymakers pointing to higher interest rates later in the year. Markets are currently pricing in a 50% chance of a 25-basis-point rate increase in September, according to CME Group's FedWatch tool, up from a 27% probability on Wednesday.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "The combination of a new chair regime, hawkish projections, and a wide dispersion of views implies a higher bar for near-term action in either direction. In our view, this points to an extended period of policy on hold, with meaningful adjustments more likely once the task force process is complete, and the committee has greater clarity on the economic outlook."
At 05:01 a.m. ET, futures were higher across the board: Dow E-minis were up 199 points, or 0.38%; S&P 500 E-minis gained 54 points, or 0.72%; and Nasdaq 100 E-minis rose 403.25 points, or 1.36%.
Sentiment was further supported by the release of the text of an interim agreement said to have been signed by the presidents of the United States and Iran to end the war, extending the April ceasefire by another 60 days to allow the two sides to reach a final deal. At the same time, the slide in oil prices to a more than three-month low kept alive hopes that inflation could be contained without additional interest-rate hikes.
Economic data released on Thursday showed U.S. retail sales rose more than expected in May, with households buying more cars and other vehicles even as they paid higher prices at the pump. Those figures, paired with a resilient economic backdrop and a rally broadening beyond technology shares, helped markets regain ground after an early-June slump.
The Nasdaq and the blue-chip Dow were on track to finish the week higher for a second straight week ahead of the Juneteenth holiday.
Other early movers included Rumble, which jumped 16.2% after rebranding to RUM Group and completing its acquisition of German AI cloud company Northern Data. Smith & Wesson shares surged 16.6% after the company reported a fourth-quarter increase in sales.
For investors assessing individual names such as Intel, valuation tools are sometimes cited; one such Fair Value calculator described in market commentary uses a mix of 17 industry valuation models to gauge stocks' fundamentals.
Overall, Friday's premarket gains reflected a balance between geopolitical relief and persistent concerns about tighter monetary policy, with market participants monitoring both the path of inflation and signals from the Fed closely.