US stock market today: S&P 500, Nasdaq futures rise up to 1.4% as chip stocks rebound after last week's rout

US stock futures traded sharply higher on Tuesday, 21 July, led by a rebound in chip stocks following last week's steep sell-off. Investors also continued to monitor developments in West Asia, where the conflict entered its 10th consecutive day.

Futures tied to the Dow Jones Industrial Average rose 166 points, or 0.3%, while S&P 500 futures and Nasdaq-100 futures gained 0.6% and 1.4%, respectively. In the previous session, all three major US indices ended in the red.

Chip stocks, which have been the primary drivers of Wall Street's rally this year, staged a recovery after last week's sharp correction. Investors appeared to be taking advantage of lower valuations after the sector suffered its worst weekly decline in more than a year.

Semiconductor companies have been among the biggest beneficiaries of the global artificial intelligence boom. However, the sector has witnessed heightened volatility amid concerns over rich valuations and whether hyperscale technology companies can sustain their heavy AI spending.

Meanwhile, tensions in the Middle East continued to escalate. The US carried out its 10th consecutive day of strikes after President Donald Trump vowed that Iran "will pay" for attacks that killed American soldiers. Iran, in turn, intensified its missile and drone attacks on US military sites in neighbouring countries.

Reports also suggested that Iran targeted US technology infrastructure in the region, including an alleged attack on Amazon's data centre in Bahrain. Technology assets have remained vulnerable throughout the conflict.

The Iranian military had earlier said it targeted US assets in Kuwait and Bahrain, including air defence systems, radar installations and administrative buildings.

Adding to concerns, Iran-backed Houthi rebels in Yemen announced plans to blockade Saudi Arabia's ports, a move that could further disrupt global energy markets after Iran's blockade of the strategically important Strait of Hormuz, according to the Associated Press.

Apart from geopolitical developments, investors are also focused on the June quarter earnings season. Technology giants Alphabet, IBM, and Tesla are scheduled to report their quarterly results later this week.

On Monday, 3M and General Motors reported better-than-expected quarterly earnings, sending their shares higher by 7% and 2%, respectively.

The renewed hostilities have pushed oil prices sharply higher, with the international benchmark Brent crude climbing above the $90-a-barrel mark on 20 July for the first time in over a month. US WTI crude futures also touched their highest level in a month on the same day.

The blockade of the Strait of Hormuz has disrupted shipping traffic, tightening crude oil and natural gas supplies to several Asian countries and adding to concerns over global energy security.

The conflict, which initially began with efforts to curb Iran's nuclear programme, has since shifted its focus to the strategically important Strait of Hormuz, with Tehran using the waterway as leverage against US military actions.

Although shipping traffic improved briefly following an interim agreement, it has since fallen back to levels seen at the start of the conflict.

On 14 July, Trump reimposed a naval blockade after another round of ceasefire negotiations collapsed. With both sides continuing to exchange attacks, there are few signs that the conflict will ease anytime soon.