US STOCKS-Wall Street set to climb as tech rebound gathers momentum

Updates with premarket activity

By Sruthi Shankar and Shashwat Chauhan

Dec 22 (Reuters) - U.S. stocks looked set to kick off the holiday-shortened week on a positive note, as technology stocks rose further on renewed enthusiasm over artificial intelligence, while investors awaited key economic data later this week.

A rally in tech stocks late last week, driven by Micron Technology's MU.O blowout forecasts and a benign inflation report, helped the benchmark S&P 500 .SPX and tech-heavy Nasdaq .IXIC reverse weekly losses. The tech sector had come under pressure earlier this month on concerns about inflated valuations and a surge in AI spending.

The latest rebound in stocks put the S&P 500 and Dow .DJI about 1% away from their record closing peak on December 11.

Micron rose 3.8% in premarket trading, while other chipmakers - Nvidia NVDA.O, Broadcom AVGO.O, Intel INTC.O and Advanced Micro Devices AMD.O - gained more than 2% each.

Nvidia has told Chinese clients it aims to start shipping its second-most powerful AI chips to China before the Lunar New Year holiday in mid-February, Reuters reported citing people familiar with the matter.

"You had a pretty swift pullback in many names and now all of a sudden, that's being viewed as a buying opportunity and that trend is going to continue because you have really strong earnings," said Hank Smith, director and head of investment strategy at Haverford Trust.

"I don't think it's analogous to the late 1990s with the internet boom, where so many of those companies forgot about earnings."

December has traditionally been a strong period for stock markets. Since 1950, the so-called Santa Claus rally has been reflected by the S&P 500 rising by an average of 1.3% over the last five trading days of the year and the first two trading days in January, according to the Stock Trader's Almanac.

This year, that period starts Wednesday and runs through Jan. 5.

Optimism around AI, a resilient U.S. economy and monetary policy easing put the three main indexes on course for their third consecutive year of gains, with the S&P 500 up more than 15%.

At 08:30 a.m. ET, Dow e-minis YMcv1 were up 17 points, or 0.04%, S&P 500 e-minis EScv1 were up 30.25 points, or 0.44% and Nasdaq 100 e-minis NQcv1 were up 170.5 points, or 0.67%.

Trading volumes are expected to remain light this week, with U.S. stock market closing at 1:00 p.m. ET on Wednesday and shut on Thursday for Christmas holiday.

But key economic data, including the preliminary reading of third-quarter GDP, December consumer confidence data and weekly jobless claims, are scheduled for release this week and could shape market expectations around the U.S. monetary policy path.

U.S. consumer prices increased less than expected in the year to November, data showed last week, supporting expectations of interest rate cuts from the Federal Reserve next year.

Among other movers, Warner Bros Discovery WBD.O rose 3.9% after Oracle co-founder Larry Ellison agreed to provide a personal guarantee of $40.4 billion of the equity financing for Paramount Skydance's PSKY.O offer to acquire the company. Paramount's shares rose 2.7%.

U.S.-listed precious metal miners jumped as gold XAU= crossed the $4,400-per-ounce level for the first time and silver XAG= jumped to a record high, propelled by expectations of U.S. rate cuts and continued safe-haven buying.

Shares of Clearwater Analytics Holdings CWAN.N jumped 8.4% after a group of private equity firms led by Permira and Warburg Pincus clinched a deal to acquire the investment and accounting software maker for about $8.4 billion, including debt.

Honeywell HON.O fell 1% after the industrial conglomerate said it expects to record a one-time charge of about $470 million in the fourth quarter.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Krishna Chandra Eluri)

((sruthi.shankar@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com))