U.S. stock index futures gained modestly Thursday night, signaling cautious optimism ahead of the third-quarter earnings season. Markets held on to bets that the Federal Reserve will continue cutting interest rates this year amid signs of a softening labor market.
As of 7:07 p.m. ET, S&P 500 futures rose 0.1% to 6,784.50, while Nasdaq 100 futures edged up to 23,312.75, and Dow Jones futures advanced 0.1% to 46,628.0 points. The uptick followed a day of mild declines on Wall Street, where investors took profits after indexes hit fresh record highs earlier in the week.
Much of the market’s momentum this year has come from technology stocks, buoyed by the rapid expansion of artificial intelligence (AI) investments. Companies like Nvidia (NASDAQ: NVDA) and Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) have led the charge, with AI-related revenue and chip supply deals fueling optimism across global markets.
Fed Rate Bets Anchor Market Sentiment
Despite Thursday’s pullback, investors largely maintained expectations for additional monetary easing. According to CME’s FedWatch Tool, markets are pricing in a 98% probability of a 25-basis-point rate cut at the Fed’s October meeting.
New York Fed President John Williams said he supports further cuts this year, citing a slowdown in hiring and inflation trends stabilizing near target levels. Minutes from the Fed’s September meeting revealed that policymakers were generally in favor of more easing, though divided on how deep future cuts should go.
Still, the absence of new economic data—caused by the ongoing government shutdown—has left both traders and officials operating with limited visibility into near-term growth prospects.
Market Highlights:
- Fed officials signal preference for additional cuts in 2025.
- Investors await updated inflation and labor data.
- U.S. economic readings delayed amid federal shutdown.
Earnings Season Set to Test Market Strength
Attention now turns to the upcoming Q3 corporate earnings, which will serve as a key gauge of how businesses are weathering tariffs, slowing trade, and tighter financial conditions.
The earnings season begins next week, led by major financial institutions including JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), and BlackRock (NYSE: BLK)—all scheduled to report Tuesday.
Later in the week, Johnson & Johnson (NYSE: JNJ), ASML Holding (AS: ASML), Bank of America (NYSE: BAC), and Microsoft (NASDAQ: MSFT) will follow with their results. Analysts expect mixed reports, with tech strength offsetting weakness in cyclical sectors such as manufacturing and retail.
With markets near all-time highs, these results could determine whether the recent rally extends—or gives way to a broader correction heading into the final quarter of 2025.