Stock futures rose slightly on Thursday as U.S. President Donald Trump and Chinese President Xi Jinping concluded their meeting in Busan, South Korea.
It also comes as investors have digested a series of big tech earnings and the Federal Reserve’s interest rate decision.
Futures contracts tied to the Dow Jones Industrial Average rose 37 points, or 0.07%. S&P futures rose slightly, while Nasdaq 100 futures were just above the flat line.
Mega-Cap Tech Giants Alphabet, Meta And Microsoft each reported quarterly results after the market closed Wednesday, which market participants were eagerly awaiting for further clues about the health of the artificial intelligence business. Investors are trying to gauge the pace of AI spending and the returns companies are getting on that investment. While shares of Google parent Alphabet jumped about 6% on strong results, shares of Meta and Microsoft fell about 8% and 4%, respectively. Reactions to the results weighed on the broader market after hours.
Meta reported its strongest revenue growth since the first quarter of 2024, but the social media company said President Donald Trump’s One Big Beautiful Bill Act caused it to incur a one-time charge of $15.93 billion. Meta expects the law to weigh on U.S. federal cash tax payments for the remainder of this year and future years. Microsoft shares fell after the company said its investment in OpenAI reduced its profits by $3.1 billion during the quarter. This revelation has raised concerns about current spending on AI.
In the previous session, the Dow Jones Industrial Average reversed course — ending the day down about 0.2%, or about 74 points — after briefly hitting a record high earlier. The S&P 500 ended the day flat, while the Nasdaq closed up almost 0.6%.
The 30-stock Dow Jones index fell sharply after Federal Reserve Chairman Jerome Powell suggested the central bank might not cut interest rates again at its December meeting, which investors were betting on. “A further reduction in the key rate at the December meeting is not a foregone conclusion. Far from it,” he said. The Fed cut its overnight borrowing rate by a quarter of a percentage point on Wednesday to end its two-day policy meeting, putting it in a range between 3.75% and 4%.
“Cutting interest rates was the easy part because the markets gave the Fed room to maneuver,” said Chris Maxey, chief market strategist at Wealthspire Advisors. “For now, there is an appropriate balance between monetary policy and the relationship between employment and inflation. Powell spooked markets with his comments about the lack of conviction about a rate cut in December and that’s where we could start to see the slow response narrative begin.”
Sam Stovall, chief investment strategist at CFRA, said the Fed “may be forced to cut interest rates more than it has indicated it wants” if technology results prove that AI-related productivity is growing at a faster rate than expected. October has historically been the most volatile month of the year, he noted, adding that any upcoming price uncertainty could ultimately provide traders with an attractive buying opportunity.
Investors are awaiting a high-stakes meeting between Trump and Chinese President Xi Jinping set to begin Wednesday evening, as the discussions could provide more clarity on the state of U.S.-China relations amid ongoing trade disputes.
