Updates before market open

By Twesha Dikshit and Utkarsh Hathi

May 27 (Reuters) - Wall Street's main indexes were set to extend gains on Wednesday, helped by sustained AI-driven momentum, while investors were cautiously optimistic that the U.S. and Iran would reach a deal.

A fragile truce between Tehran and Washington remained in place despite recent U.S. strikes near the Strait of Hormuz, which Iran called a "gross violation" of the ceasefire agreement.

"Markets have looked past any lack of progress (in peace talks) that we've seen over the past few weeks and continue to believe that a diplomatic solution is more likely than a re-escalation to where the conflict began," said Brock Weimer, analyst on investment strategy at Edward Jones.

In the "longer term, the outlook remains supportive for these companies that are exposed to the AI trade and the earnings growth that they've shown has backed that up," Weimer added.

At 08:24 a.m. ET, Dow E-minis YMcv1 were up 61 points, or 0.12%, S&P 500 E-minis EScv1 were up 22.75 points, or 0.3%, and Nasdaq 100 E-minis NQcv1 were up 247.75 points, or 0.82%.

Both the S&P 500 .SPX and the Nasdaq .IXIC closed at record highs on Tuesday, driven by renewed confidence around AI, as Micron surpassed $1 trillion in market value for the first time.

Shares of the memory chipmaker MU.O jumped 8.5% in premarket trading. Peers SanDisk SNDK.O, Western Digital WDC.O and Seagate Technology STX.O were up between 4.1% and 6.6%.

A strong earnings season and expectations of about 29% year-on-year growth in the first quarter have aided the rally on Wall Street, with the blue-chip Dow Jones .DJI becoming the last major index to hit a record high on Friday.

Goldman Sachs raised its 2026 year-end forecast for the S&P 500 to 8,000 from 7,600, citing continued strength in corporate earnings.

Markets will next look toward the personal consumption expenditures index data on Thursday. The Federal Reserve's key inflation measure could provide fresh clues on the monetary policy path forward under new chair Kevin Warsh.

Money markets currently expect the Fed to keep rates steady for the rest of the year, with some pricing in a 25 basis point hike in December.

Among early movers, Zscaler ZS.O tumbled 25% after the cloud security firm projected fourth-quarter revenue below expectations.

GlobalFoundries GFS.O fell almost 8% after Bloomberg News reported that majority owner Mubadala Investment Company was seeking to raise $1.91 billion from an unregistered block sale of GFS shares.

Bath & Body Works BBWI.N jumped 10.7% after the retailer reported first-quarter sales and profit above expectations.