Dow Jones futures rally as geopolitical risks ease and AI earnings lift sentiment

• President Trump’s indication that further military action against Iran was less likely prompted a sharp rise in US index futures.
• Quarterly results from CoreWeave that comfortably beat expectations, alongside Anthropic’s possible market debut, revived confidence in the AI sector.
• Stronger expectations of a Federal Reserve rate rise following the CPI release drove Tuesday’s losses, ahead of the recovery in pre-market trading.

A 0.16% rise leaves Dow Jones futures trading at around 52,400 in Wednesday’s European session. Gains of 0.60% in S&P 500 futures and 1.45% in Nasdaq 100 futures put them at approximately 7,590 and 28,230 respectively.

Signs that geopolitical tensions were easing brought risk appetite back to markets, lifting US stock futures sharply. Further military action against Iran may no longer be necessary, US President Donald Trump indicated, with US Secretary of State Marco Rubio backing that position at the G7 summit. Congressional Democrats, meanwhile, plan to use the forthcoming government funding deadline to press the administration towards a diplomatic solution.

Strong results from AI computing provider CoreWeave gave sentiment a further lift and renewed interest in the wider artificial intelligence sector. After reporting quarterly earnings above expectations and raising its outlook, the company saw its shares climb nearly 8% in after-hours dealing, highlighting the resilience of demand for AI infrastructure. Reports of a possible Anthropic market debut as early as next week also bolstered confidence in the sector. The company is seeking to raise up to $90 billion at a diluted valuation of close to $1.4 trillion.

Tuesday’s weaker Wall Street session preceded this recovery: the Dow Jones lost 0.35%, the S&P 500 declined 0.38% and the Nasdaq Composite dropped 0.74%. The latest CPI figures weighed on US shares by reinforcing expectations that the Federal Reserve would raise rates in December. The CME FedWatch tool put the probability of a December increase at 85%.

US core inflation exceeds expectations in October

The latest US inflation figures were stronger than expected, according to Societe Generale’s Jan Groen, who notes that “October core CPI surprised to the upside at 0.3% m/m.” In his view, the firmer core figure highlights persistent underlying price pressures. Markets are nevertheless awaiting the corresponding PCE figures to assess the inflation trend more fully.