Dow Jones futures rise on easing Middle East tensions, Fed rate pause bets

Dow Jones futures gain by 0.32% to trade near 52,560 during European hours on Monday. S&P 500 futures rise 0.14% to trade around 7,670, while Nasdaq 100 futures decline 0.13% to trade near 29,080.

US stock futures deliver mixed results as investors closely monitor ongoing geopolitical tensions in the Middle East. Tensions briefly eased when U.S. President Donald Trump ruled out immediate military action against Iran, stating, “there will not be a strike today,” according to Al Jazeera. However, regional concerns remained high after Yemen's Houthis declared on Sunday that they will continue targeting Saudi Arabia's King Khalid Airport in Riyadh, as reported by Reuters, an announcement that arrived just hours after Saudi officials confirmed that airport flights had resumed despite repeated attacks.

In monetary policy, financial markets anticipate that the Federal Reserve will keep interest rates unchanged at its upcoming October meeting before potentially pursuing another rate hike in December. According to the CME FedWatch Tool, market pricing currently reflects a 90.6% probability of a rate pause at the October 27–28 policy meeting, alongside a 79.7% chance of a rate increase in December.

Meanwhile, Wall Street posted losses for a second consecutive week, weighted down by growing market anxiety over massive artificial intelligence spending and rising oil prices. Looking ahead, corporate attention shifts to the technology sector, where investors are preparing for key earnings reports from industry giants including Amazon, Alphabet, Microsoft, and Intel.

AI earnings test seen rivaling FOMC for market focus

Strategists at Deutsche Bank highlight artificial intelligence as a key market theme this week, arguing that upcoming US tech earnings will offer “an unusually important test of the recent concerns around the sector.” They point out that Alphabet and Microsoft report on Wednesday, with Amazon to follow on Thursday, and caution that the market’s reaction to these results and, in particular, “the latest capex plans could rival Wednesday’s FOMC for top billing.”