Dow Futures tick higher, following a relief rally in semiconductor stocks that fuelled the best day for the S&P 500 in nearly two months. Results from iPhone-maker Apple and e-commerce giant Amazon dominate the earnings slate following the close of U.S. markets. Tesla CEO Elon Musk has dismissed rumours surrounding the electric car manufacturer’s operations in China, while the Bank of Japan has maintained its current stance on interest rates.
Dow futures indicated an upward trajectory on Friday, implying a continuation of the gains achieved in the previous session, as investors processed a series of significant market developments throughout the week. By 02:36, the Dow futures contract had risen by 218 points, or 0.4%, the S&P 500 futures had ticked up by 24 points, or 0.3%, and the Nasdaq 100 futures had gained 269 points, or 1.0%. The primary indices on Wall Street experienced a notable increase on Thursday, driven by a significant recovery in semiconductor stocks. A well-received earnings report from software giant Microsoft has rekindled optimism regarding the longevity of the artificial intelligence boom. Reports indicate that hedge fund Situational Awareness has divested a significant share of its public equity holdings, which supports the view that the recent dislocation in AI stocks is attributed more to “technicals and forced selling rather than a dramatic deterioration in fundamentals,” according to analysts. Despite returns from Facebook-owner Meta Platforms maintaining a degree of scepticism regarding substantial AI expenditures, the relief rally propelled the Philadelphia Semiconductor Index, an industry tracker, to a significant increase of 8.19%, marking its largest gain since April 2025. That, in turn, propelled the benchmark S&P 500 to its most significant performance in seven weeks, despite, as noted by analysts at Deutsche Bank, a majority of the index’s constituents experiencing declines. Highlighting the active dynamics of the current trading week, market participants were also processing the Federal Reserve’s decision on Wednesday to maintain interest rates, alongside fluctuations in oil prices associated with persistent tensions in the Middle East. U.S. data indicated that the world’s largest economy experienced a slowdown in the second quarter; however, it maintained a relatively robust position. Additionally, inflation, as reflected by the core personal consumption expenditures index, showed signs of cooling in June. Overnight, the positive sentiment continued into Asia, where the tech rebound lifted the KOSPI in South Korea by 17.91%.
Meanwhile, a new set of prominent technology sector earnings captured attention. Apple shares experienced a decline in after-hours trading following the company’s forecast that sales growth for the September quarter would range from 9% to 11%, falling short of analysts’ expectations of approximately 12%. The outlook for gross profit margins has also fallen short of forecasts. The company has been contending with supply chain disruptions that have hindered its ability to satisfy demand for its popular devices, raising concerns that this trend may persist into the current quarter. Concurrently, an increase in memory chip prices is expected to negatively impact profit margins. Still, as Thomas Monteiro, notes: “Apple’s story continues to be cash generation without the massive AI capex overhang that the competition is dealing with, and that showed across most parts of the operation.”
In a demonstration of this trend, e-commerce giant Amazon has raised its annual spending forecast to $220 billion, reflecting an increase of $20 billion, as the company highlighted the rising costs associated with memory chips. Despite recent investor concerns regarding the potential for these expenditures to yield sustained profitability, Amazon’s stock experienced an after-hours increase, largely driven by robust performance in its cloud-computing sector. CEO Andy Jassy informed investors during a post-earnings call that the Amazon Web Services division has the potential to reach an annual revenue of a trillion dollars “in time. Sales at AWS increased by 37% compared to the previous year, reaching $42.2 billion in the second quarter. Analysts at Vital Knowledge remarked that Amazon delivered “blow-out results,” yet noted that its free cash flow of negative $9 billion “speaks to the cash pressures facing hyperscalers as they race to stay ahead in the AI race.”
Tesla CEO Elon Musk has refuted a report claiming that the electric car manufacturer was involved in discussions regarding the separation of its Chinese operations for a possible merger with Musk’s rocket enterprise SpaceX. Musk responded with “fake news” to a now-deleted post referencing a report indicating that Tesla insiders were instructed to brace for a spinoff, sale, or potential closure of its China operations in connection with a merger with SpaceX. “This has never even come up in a discussion ever. Absurdly fake news. People should assume news is fake until proven otherwise,” Musk stated in a subsequent post. Tesla shares experienced an increase of over 2% in aftermarket trading subsequent to a report, which indicated that internal discussions regarding the separation of Tesla’s Chinese operations were still in progress.
The Bank of Japan maintained its current interest rates, opting to assess the impact of a recent increase on the economy. The institution expressed ongoing caution regarding the geopolitical tensions in the Middle East and the depreciation of the yen. The central bank indicated that government support is expected to bolster growth and stabilise prices, as it revised down its core consumer price index inflation forecast while simultaneously raising its gross domestic product outlook for the current year. The BOJ maintained its benchmark overnight call rate at 1.0%, as determined by an 8-1 majority vote from its rate-setting board. Board member Hajime Takata was the only dissenting voice, advocating for an additional 25 basis point increase following the hike in June. Friday’s hold also followed reports of intervention by the Japanese government in currency markets, which contributed to a significant recovery of the yen from its lowest levels in nearly 40 years. The U.S. is reported to have performed a rate assessment on the yen, with Treasury Secretary Scott Bessent stating that the currency appears “very undervalued” in his view.