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US stock futures slipped from record highs as investors weighed uncertainty over Iran talks alongside the latest developments in artificial intelligence.

Futures attached to the Dow Jones Industrial Average (YM=F) declined 0.4% while those for the benchmark S&P 500 (ES=F) fell by about 0.2%. Futures attached to the tech-heavy Nasdaq 100 (NQ=F) edged just below the flat line.

Alphabet (GOOG) stock edged lower after the company said it aims to raise $80 billion to realize its AI infrastructure plans. Hewlett Packard Enterprise (HPE), meanwhile, reported a record quarter driven by AI data center expansion, sending its stock up more than 20%.

Investor sentiment was more subdued on Tuesday morning following record highs for the major indexes, as prospects of a peace deal in the Middle East remained in focus. On Monday, President Trump intervened in a news cycle that was pointing to a breakdown in US-Iran negotiations, announcing Israel and Hezbollah had agreed to stop attacks. Shortly after, the president added that talks with Iran were continuing “at a rapid pace.”

Oil prices eased, with Brent crude (BZ=F) oil futures falling 1% to $93 a barrel, while West Texas Intermediate crude (CL=F) futures dropped to $91 a barrel.

On Tuesday, investors will get fresh insight into the health of the economy with the release of the Job Openings and Labor Turnover Survey (JOLTS) report. The JOLTS report is the first in a series of employment data releases this week that culminate with the May jobs report on Friday. Investors are looking for signs of economic strain amid rising prices, which could put the Federal Reserve in a difficult position on interest rates.

Earnings season also continues to wind down this week, with Palo Alto Networks (PANW), Dollar General (DG), Ulta Beauty (ULTA), and Victoria’s Secret (VSCO) scheduled to report their results on Tuesday.

Yahoo Finance’s Jared Blikre writes:

The S&P 500’s (^GSPC) rebound looks a lot thinner once AI enablers are stripped out.

The S&P 500’s latest rally is less broad than the headline index suggests. A Goldman Sachs index that excludes artificial intelligence enablers is slightly lower since late February, while the S&P 500 is up about 10% and AI winners have surged over 45%.

That makes this less a simple “bull market” story than a concentration story. AI is not just leading the tape — it is carrying a growing share of the index’s gains.

Concentration has been one of the defining features of this bull market since the Magnificent Seven label, referring to Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA), took hold in 2023. Back then, the story was a handful of megacap tech stocks dragging the index higher while much of the market lagged behind.

Read more here.

Yahoo Finance’s Ines Ferré reports:

Hewlett Packard Enterprise (HPE) was poised to open more than 23% higher on Tuesday after the server and networking products maker reported record second quarter earnings, fueled by a boom in enterprise investments in AI infrastructure.

The company also raised its full-year outlook while accelerating its long-term financial goals by two years, forecasting that demand for its servers will remain strong well into 2027.

“Traditional server orders increased triple digits as customers continue to modernize their compute infrastructure and invest in AI inferencing,” CEO Antonio Neri said during the company’s earnings call on Monday afternoon.

“Orders more than doubled, significantly outpacing revenue, resulting in a record company backlog,” he added.

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Bloomberg reports:

Oil steadied after its biggest gain in about a month, as uncertainty about the state of US-Iran peace talks raised the risk that energy flows from the Persian Gulf could be curtailed for longer.

West Texas Intermediate (CL=F) traded near $92 a barrel, after adding more than 5% in the previous session, while Brent (BZ=F) settled just under $95. Prices surged Monday on a report that Tehran was halting talks with Washington in protest of Israel’s attacks in Lebanon, before paring after US President Donald Trump said the negotiations were continuing.

The US president said a memorandum of understanding with Iran to reopen the Strait of Hormuz could happen over the next week, according to a telephone conversation he had with ABC News. The US still had “to get a few more points” before a deal, he said.

The lack of clarity over the potential extension of the current ceasefire — and the future of energy flows through the Strait of Hormuz — has buffeted oil prices, which fell last month on optimism a deal could be reached. The report by Iran’s semi-official Tasnim news agency also said that Tehran and its regional proxies have placed on their agenda the complete closure of Hormuz, as well as the Bab el-Mandeb Strait — a crucial alternative for oil exports.

Read more here.