Easing Middle East tensions and Fed rate pause bets lift Dow Jones futures

• Moves in oil prices and the continuing Middle East conflict remain in focus as US index futures trade in mixed territory.
• An October hold in Federal Reserve interest rates is widely expected by traders, with a December increase remaining a possibility.
• Earnings releases from major technology groups, including Amazon, Alphabet, Microsoft, and Intel, are coming into focus on Wall Street.

A 0.32% advance takes Dow Jones futures to around 52,560 in Monday’s European session. S&P 500 futures are trading roughly 0.14% higher at 7,670, whereas Nasdaq 100 futures are down 0.13% at about 29,080.

With investors keeping a close watch on geopolitical tensions in the Middle East, US equity futures are showing a mixed performance. According to Al Jazeera, tensions subsided briefly after US President Donald Trump ruled out immediate military action against Iran, saying, “there will not be a strike today,”. Concerns across the region nevertheless remained elevated. Reuters reported that Yemen’s Houthis said on Sunday they would continue targeting Saudi Arabia’s King Khalid Airport in Riyadh. That announcement came just hours after Saudi officials confirmed the resumption of flights at the airport despite repeated attacks.

A 90.6% probability of unchanged rates at the October 27–28 policy meeting is currently priced in, according to the CME FedWatch Tool, alongside a 79.7% likelihood of an increase in December. These expectations reflect financial markets’ view that the Federal Reserve will hold interest rates steady at its forthcoming October meeting before potentially raising them again in December.

Growing unease over substantial artificial intelligence expenditure and higher oil prices weighed on Wall Street, which recorded a second successive weekly decline. Attention on the corporate front now turns to technology earnings, with investors awaiting key results from major groups including Amazon, Alphabet, Microsoft, and Intel.

AI earnings could compete with FOMC for market attention

This week’s US technology results put artificial intelligence firmly in the spotlight, according to Deutsche Bank strategists, who describe the releases as “an unusually important test of the recent concerns around the sector.” Alphabet and Microsoft are due to report on Wednesday, followed by Amazon on Thursday, they note. In their view, the market response to those earnings, particularly “the latest capex plans could rival Wednesday’s FOMC for top billing.”