Dow Jones Futures rise as Wall Street starts the week higher

• Wednesday's Fed decision keeps Wall Street cautious, with US index futures showing a mixed performance.
• An 89.5% probability of the Fed leaving rates on hold in October is priced into markets.
• Equity markets remain underpinned by recent advances in leading technology shares.

A 0.05% rise takes Dow Jones futures to around 52,580 in Tuesday's European session. By contrast, S&P 500 futures are down 0.11% at roughly 7,710, while Nasdaq 100 futures retreat 0.30% to around 29,350.

With Wednesday's Federal Reserve (Fed) policy announcement approaching, caution among traders has left US stock futures mixed. Markets expect interest rates to remain unchanged at the Federal Reserve's October meeting, with another increase potentially following in December. The CME FedWatch Tool puts the market-implied probability of an October hold at 89.5%, while pricing indicates an 82.3% chance of a December rate rise.

Describing the pressure on the US economy, Heather Long, chief economist at Navy Federal Credit Union, said: “Inflation is still the No. 1 problem in the US economy, and there are a lot of signs it is getting more broad-based.” She also said: “For consumers, it means really high borrowing costs for the foreseeable future.” On the timing of a rate increase, however, Heather added, “given that it’s right before an election,” and concluded, “they won’t hike in October.”

Enthusiasm for Anthropic's planned IPO lifted technology shares, helping Wall Street make a firm start to the week ahead of a packed earnings schedule and the Federal Reserve's policy meeting. Monday's regular session saw the Dow rise 0.3%, the S&P 500 gain 0.7% and the Nasdaq Composite advance 0.8%.

As investors assessed concerns about the substantial borrowing required to finance artificial intelligence investment, Tesla jumped more than 5% and Nvidia added 2%. Microsoft and Amazon also closed higher.

Chip stocks extend gains as Mag 7 and ai laggards recover

A sharp rebound in semiconductor shares helped sustain the positive mood in equities, according to analysts at Deutsche Bank. They point to the Philadelphia Semiconductor Index's rise of “+2.82% after falling -3.21% last week.” Gains also extended to the wider group of technology leaders: the analysts note that “the Mag 7 gained +0.76%,” while several recent AI-related laggards recovered. Among them was CoreWeave, which closed “+1.76%, despite initially falling in pre-market trading after Elon Musk wrote on X on Sunday that ‘neoclouds’ would see ‘guppy-level death and consolidation’, arguing that debt markets would be reluctant to finance companies overwhelmingly reliant on AI data centres for their revenues.”