Where we are: Dow futures are pointing to a positive open, trading around 50,150, fueled by strong tech earnings. This puts the index on track to surpass its all-time high. The overnight range has been relatively tight, consolidating gains from yesterday’s session. Currently, the Dow is well above yesterday’s NY close, signaling strong upward momentum.
What’s driving it: The surge in Dow futures is primarily driven by the ongoing tech rally, spurred by impressive earnings from companies like Cisco, whose AI orders are boosting sentiment. The prospect of a Trump-Xi summit is also supporting risk appetite, with hopes for easing trade tensions. While energy prices remain elevated, the strong performance of tech stocks is overshadowing concerns about inflation and potential Fed hawkishness.
- Cisco is up 15% premarket following strong earnings and forecasts.
- Trump-Xi summit is supporting risk appetite.
- Net non-commercial positioning in Dow Jones futures is modestly short (-677 contracts), indicating potential for a squeeze if the rally continues.
NY session focus: Traders will be closely watching the 08:30 ET release of Core Retail Sales and Retail Sales data, as well as Unemployment Claims. Strong prints could reinforce hawkish Fed expectations, potentially tempering the rally, while weak data could fuel further upside. Key levels to watch are 50,200 as initial resistance and 50,000 as immediate support. The AI-driven tech trade is working, but vulnerable to a broader risk-off move if geopolitical tensions flare. The pain trade would be a significant upside surprise in retail sales leading to renewed hawkish Fed bets.