Dow Jones Futures Rise Ahead Of US PCE Data

• Dow Jones futures gain, but Tech drags S&P 500 and Nasdaq down following Alphabet’s earnings drop.

• In after-hours trading, Alphabet plunges 10% over AI spending concerns, while Microsoft gains 4% on strong Azure cloud growth.

• Fed holds interest rates steady at 3.75%–4.00% amid elevated inflation, with two officials dissenting.

US stock futures showed mixed results during European trading hours on Thursday. Dow Jones futures gained 0.37% to trade near 52,890, while S&P 500 futures fell 0.38% to around 7,750 and Nasdaq 100 futures lost 1.2% to near 29,620. Traders are now turning their attention to the upcoming US Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation metric, for clearer signals on the future trajectory of monetary policy.

The market divergence was largely driven by major tech earnings. Alphabet plunged around 10% in after-hours trading after reporting weaker-than-expected third-quarter revenue across most core businesses, reigniting concerns over the high cost of artificial intelligence investments. Conversely, Microsoft rose nearly 4% following better-than-expected quarterly results boosted by strong growth in its Azure cloud infrastructure.

Meanwhile, the Federal Reserve kept interest rates unchanged at 3.75%–4.00% as widely expected, while offering limited clarity on its next policy direction. In its official statement, the central bank noted that economic activity continues to expand, supported by resilient domestic spending, robust capital investment, and strong productivity growth. On employment, the Fed observed that job gains have matched workforce expansion while the unemployment rate has remained relatively stable.

Acknowledging that price pressures remain elevated, the Fed chose to pause further rate hikes to gather additional data before deciding its next monetary stance. The decision was not unanimous, as Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of an immediate rate increase.

Following the meeting, Fed Chair Kevin Warsh reaffirmed the committee's commitment to returning inflation to its 2% target, emphasizing the underlying strength of the economy. He also noted that the Fed plans to hold eight meetings next year, including one without a formal vote, and anticipates six policy-setting meetings in 2028.