Dow Jones futures edge higher ahead of US PCE release

• Dow Jones futures rise as Alphabet’s earnings-related slide weighs on tech, pulling S&P 500 and Nasdaq lower.
• Strong Azure cloud growth lifts Microsoft 4% in after-hours trading, whereas concerns about AI spending send Alphabet down 10%.
• With inflation still elevated, the Fed leaves interest rates at 3.75%–4.00%; two officials dissent.

A 0.37% rise took Dow Jones futures to near 52,890 during Thursday’s European session, although US stock futures were mixed overall. S&P 500 futures slipped 0.38% to around 7,750, while Nasdaq 100 futures declined 1.2% to near 29,620. Attention is now shifting to the forthcoming US Personal Consumption Expenditures (PCE) price index. Traders are looking to the Federal Reserve’s preferred inflation gauge for a clearer indication of the future path of monetary policy.

Earnings from major technology companies largely accounted for the contrasting market moves. After third-quarter revenue fell short of expectations across most of its core businesses, Alphabet shed around 10% in after-hours trading, reviving worries about the high cost of investment in artificial intelligence. Microsoft, by contrast, advanced nearly 4% as strong growth in its Azure cloud infrastructure helped quarterly results exceed expectations.

The Federal Reserve’s widely anticipated decision to leave interest rates at 3.75%–4.00% provided little guidance on its next policy move. According to the central bank’s official statement, resilient domestic spending, robust capital investment and strong productivity growth continue to support economic expansion. The Fed also noted that employment gains have kept pace with growth in the workforce, with the unemployment rate remaining relatively stable.

Although price pressures remain elevated, the Fed opted to hold off on further rate rises while collecting more data to inform its next policy decision. Two officials opposed that decision: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack both favoured an immediate increase in rates.

At the post-meeting briefing, Fed Chair Kevin Warsh stressed the economy’s underlying strength while reiterating the committee’s commitment to bringing inflation back to its 2% target. He added that eight meetings are planned for next year, one of which will not include a formal vote, and that the Fed expects to hold six policy-setting meetings in 2028.