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Dow Jones futures rise as tech rally, AI optimism drive market rebound

  • Dow Jones futures advance following Wall Street gains, driven by renewed AI optimism and surging semiconductor stocks.
  • Strong Microsoft and Amazon earnings boosted confidence in sustained hyperscaler spending and resilient AI demand.
  • Market sentiment boosted as falling Treasury yields, lower oil prices, and US-Iran diplomatic progress eased inflation concerns.

Dow Jones futures surge 0.59% to trade around 52,680 during European trading hours on Friday. Meanwhile, S&P 500 futures rise 0.44% to trade near 7,500, while Nasdaq 100 futures rise 1.10%, trading near 28,540, respectively.

US stock futures advanced following overnight Wall Street gains, fueled by renewed AI optimism and a global surge in semiconductor stocks. Strong quarterly earnings from Microsoft and Amazon reinforced investor confidence in sustained hyperscaler spending and resilient demand for artificial intelligence. Amazon jumped over 9% in extended trading on upbeat results, while Microsoft steadied after its own strong release.

This momentum built on Thursday’s regular session, where the tech-heavy Nasdaq Composite surged 2.78%, the S&P 500 added 1.66%, and the Dow gained 1.19%, with technology, consumer discretionary, and industrial sectors leading the broader market recovery.

Market sentiment improved as the US 10-year Treasury yield dropped below 4.65% at the time of writing, while cooling oil prices helped ease inflation concerns. Diplomatic progress in US-Iran talks over the Strait of Hormuz, alongside a landmark Gaza peace agreement announced by US President Donald Trump, further reduced geopolitical risks and calmed energy markets. However, the CME FedWatch tool suggests that the markets are currently pricing in an over 65% chance of a Federal Reserve rate hike in September.

Fed doubles down on 2% goal as resilient economy keeps Dollar bid

Warsh delivered a more hawkish tone relative to the historical average, with the FXS Speechtracker score rising to 7/10 versus a 6/10 baseline, underscoring a firmer commitment to the inflation fight. The repeated emphasis that “only one target and it is 2%,” coupled with remarks that inflation “cannot be cured in 9 weeks” and that the Committee “will not hesitate to act,” signals a clear rejection of any tolerance for a higher inflation target and a willingness to keep policy restrictive for longer. While Warsh stressed collegial, data-informed debate and an economy showing “impressive resilience,” the message to markets is that any recent easing in inflation data does not justify a premature pivot.

The FXS Fed Sentiment Index jumped by 18.94 points to 147.58, reinforcing that the overall communication landed firmly in hawkish territory according to the FXS Speechtracker. With the index far above the neutral 100 line, markets are likely to interpret this as a strong bias toward maintaining or even tightening restrictive policy, a backdrop that typically supports the Dollar against lower-yielding peers.

FXS Fed Sentiment Index: Daily Chart

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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