Dow Jones futures surged by 0.59% to approximately 52,680 during European trading hours on Friday, reflecting a strong rebound in US equity markets. S&P 500 futures rose 0.44% to near 7,500, and Nasdaq 100 futures climbed 1.10% to around 28,540, following overnight gains on Wall Street. The rally was primarily driven by renewed optimism in artificial intelligence and a global surge in semiconductor stocks, with strong quarterly earnings from Microsoft and Amazon reinforcing investor confidence in continued hyperscaler spending and robust AI demand. Amazon shares jumped over 9% in extended trading after reporting upbeat results, while Microsoft maintained its gains after its own strong earnings release [1].
This positive momentum built on Thursday’s regular session, where the Nasdaq Composite surged 2.78%, the S&P 500 added 1.66%, and the Dow gained 1.19%. The technology, consumer discretionary, and industrial sectors led the broader market recovery [1]. Market sentiment was further buoyed by a drop in the US 10-year Treasury yield below 4.65% and cooling oil prices, which helped ease inflation concerns. Diplomatic progress in US-Iran talks over the Strait of Hormuz and a landmark Gaza peace agreement announced by US President Donald Trump contributed to reduced geopolitical risks and calmer energy markets [1].
Despite the improved sentiment, the CME FedWatch tool indicated that markets are currently pricing in an over 65% chance of a Federal Reserve rate hike in September. Fed official Warsh delivered a notably hawkish tone, emphasizing the central bank’s unwavering commitment to the 2% inflation target and signaling a willingness to keep policy restrictive for longer. The FXS Fed Sentiment Index jumped by 18.94 points to 147.58, well above the neutral 100 line, reinforcing the perception of a strong bias toward maintaining or tightening restrictive policy—a stance that typically supports the US Dollar against lower-yielding peers [1].
CONCLUSION
US equity futures rallied strongly on renewed AI optimism and robust earnings from major tech firms, with Amazon and Microsoft leading the gains. While easing inflation and geopolitical risks supported market sentiment, the Federal Reserve’s hawkish stance and the high probability of a September rate hike suggest that monetary policy will remain a key focus for investors. The overall market takeaway is one of cautious optimism, tempered by expectations of continued policy restraint.