U.S. stock index futures edged higher on Monday, after last week's decline on Wall Street led by semiconductor stocks, as investors await a batch of major corporate earnings results that could test the AI-driven rally in the market, with caution persisting due to escalating tensions in the Middle East.

The second-quarter earnings season accelerates this week, with results expected from a number of major companies, including Alphabet, Tesla, Intel, and IBM.

Alphabet, one of the 'Magnificent Seven' in the U.S. market, is a prominent player in the field of artificial intelligence, spending billions of dollars on data centers and related infrastructure.

The surge in capital spending on AI has been a key driver of market gains this year, boosting shares of semiconductor companies and others seen as the biggest beneficiaries of this expansion, and helping major U.S. indexes hit record highs.

Intel and Texas Instruments will be closely watched, after the strong rally in chip stocks turned into a sharp decline in recent weeks.

The Philadelphia Semiconductor Index ended Friday's trading more than 20% below its all-time high reached in late June, confirming it has entered a correction.

Kathleen Brooks, research director at XTB, said: 'If earnings results in the coming weeks indicate that companies are still in the spending phase for AI development, investors' patience is likely to run out, and the selling wave could continue through the summer months.'

At 5:18 a.m. Eastern Time, Dow Jones Industrial Average futures rose 106 points, or 0.2%, while S&P 500 futures gained 16.5 points, or 0.22%. Nasdaq 100 futures advanced about 111.75 points, or 0.39%.

All three major U.S. indexes posted sharp declines last week, hit by a slump in semiconductor stocks that had rallied strongly recently. The decline came despite positive inflation data easing some concerns about a possible Federal Reserve rate hike later this month, while major U.S. banks kicked off earnings season with strong results.

According to the CME FedWatch Tool, markets are pricing in a 12% probability of a quarter-point rate hike at the Federal Reserve's July meeting, and a 53% probability of another hike in September.

Investors are closely monitoring developments in the war between the United States, Israel, and Iran, after tensions escalated in the nearly five-month-old conflict.

U.S. forces launched air strikes on Iran for the ninth consecutive day on Monday, raising concerns about navigation through the Strait of Hormuz.

The renewed tensions have raised fears that energy prices could rise again to levels seen at the start of the war, potentially rekindling inflation concerns. Brent crude earlier in the day broke above $90 a barrel for the first time since early June.

Brooks said the recent escalation 'has also undermined the assumption that the Middle East crisis is over and that energy prices will return to normal levels.'