U.S. stock futures pointed to a higher open on Thursday, led by a rebound in technology shares after the Federal Reserve's hawkish inflation stance triggered a sharp sell-off in the prior session. Dow Jones Industrial Average futures rose 315 points, or roughly 0.6%, while S&P 500 futures gained 0.83% and Nasdaq 100 contracts advanced 1.32%, signaling renewed appetite for growth stocks.
Intel Surges on Apple Chip Collaboration
Intel Corp. was the standout pre-market mover, jumping 9.3% after President Donald Trump said Apple Inc. has agreed to work with the company on designing and manufacturing chips in the United States. The announcement sharpened the market's focus on Washington's push to rebuild domestic semiconductor capacity. Apple has been seeking to diversify its supply chain, while Intel's foundry business has been under pressure to prove it can compete with Taiwan Semiconductor Manufacturing Co. Other chip-related names also benefited from the sentiment, though the broader move appeared selective rather than euphoric, as investors continue to differentiate between genuine AI and manufacturing winners and stocks that may have already priced in too much optimism.
Fed Rate Hike Odds Rise
The main restraint on markets remains monetary policy. The Fed held rates steady this week, but Chair Kevin Warsh stressed the need to bring inflation under control. Policymakers also projected the possibility of higher rates later this year. Markets are now pricing about a 50% chance of a 25-basis-point rate increase in September, up from 27% on Wednesday, according to CME FedWatch. “The combination of a new chair regime, hawkish projections, and a wide dispersion of views implies a higher bar for near-term action in either direction,” Mark Haefele, chief investment officer at UBS Global Wealth Management, told Reuters.
Oil Slide Provides Some Relief
Lower crude prices helped soften the blow from the Fed. Oil fell to more than three-month lows after the U.S. and Iran released the text of an interim agreement aimed at extending a ceasefire and allowing talks toward a final deal. Cheaper oil matters for equities because it can ease inflation pressure and support consumer spending. It also gives the Fed less reason to respond aggressively to energy-driven price shocks, though the central bank's latest projections show officials remain uneasy. For context, recent U.S.-Iran talks have also boosted the Dow in prior sessions.
Retail Sales and Pre-Market Movers
Among other pre-market movers, Smith & Wesson rose after stronger quarterly sales, while GameStop gained as traders rotated into high-beta retail favorites. The recovery comes before Friday's Juneteenth market holiday, which is expected to thin positioning into the long weekend. Traders are also weighing stronger retail sales data and a higher probability that the Fed may still raise rates later this year.
Broader Market Context
The bounce suggested traders were not ready to abandon the equity rally, even after the Fed's projections forced markets to price a more hawkish path. The Nasdaq and Dow remained on track for a second straight weekly gain before the Juneteenth closure. However, the broader market remains cautious, as the Fed's repricing keeps investors on edge. For a deeper look at recent volatility, see our coverage of the AI and chip rout that sank the Nasdaq 2.2% and the Dow futures drop of 320 points on rate hike fears.
This article is for informational purposes only and does not constitute financial advice.
