Dow Jones futures gain on potential US-Iran talks, tech rally

The Dow Jones futures rise 0.08% to trade near 52,610, while S&P 500 futures gain 0.10%, trading near 7,510. Tech-heavy Nasdaq 100 futures led the upward move, rising 0.20% to trade near 30,110 during European trading hours on Tuesday.

US index futures moved higher as investors weighed the potential for US-Iran talks in Doha under a fragile interim ceasefire. Adding to the upward momentum, index futures extended gains following an overnight rally on Wall Street that was powered by strong performances in megacap technology stocks.

The Dow Jones climbed 0.59% during Monday's regular US session to secure a fresh record close. Highlighting the day's action, Alphabet surged 5% in its debut session as a Dow component after replacing Verizon. Other tech heavyweights also posted gains: Nvidia rose 1.3%, Amazon advanced 3.2%, Meta added 2.2%, and Tesla jumped 8.5%. The broader markets followed suit, with the S&P 500 rising 1.18% and the Nasdaq 100 climbing 2.07%.

Market sentiment may adopt caution amid rising hawkish sentiment surrounding the Federal Reserve’s (Fed) policy trajectory. According to the CME FedWatch tool, traders are now pricing in above 60% probability of a Fed interest rate hike by September.

Traders are looking ahead to Wednesday's US ADP employment data and Thursday's Nonfarm Payrolls (NFP) report for clues on the Federal Reserve's next policy moves. A stronger-than-expected jobs report could reinforce the Fed's "higher-for-longer" interest rate stance, potentially dampening appetite for risk-sensitive assets.