Stock Futures Rise on Strong Earnings and Rate-Cut Bets

Stock index futures rise on strong earnings and Fed rate-cut bets. Palantir Technologies shares climb over 5% after upbeat Q2 results and raised guidance. The Magnificent Seven stocks advance, with Nvidia leading gainers in the Dow and Alphabet rising over 3%. Chip stocks also gain, while ON Semiconductor plunges over 15%. The Fed's September meeting is priced in with an 88.1% chance of a 25 basis point rate cut.

Stock index futures rallied on Monday, July 2, 2025, following a strong set of earnings reports and increasing speculation that the Federal Reserve (Fed) will lower interest rates at its September meeting. The S&P 500 Index ($SPX) (SPY) closed up +1.47%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.87% [2].

The market's optimism was driven by a series of impressive earnings reports, particularly from the Magnificent Seven technology stocks and semiconductor chip makers. Palantir Technologies Inc (NASDAQ:PLTR) shares climbed over 5% after the company reported second-quarter (Q2) results that beat Wall Street estimates. Palantir lifted its annual guidance following Q2 results, which showed record contract wins and strong U.S. commercial business expansion [1].

Among the Magnificent Seven, Nvidia Corporation (NASDAQ:NVDA) led gainers in the Dow, rising over 3%. Alphabet Inc (NASDAQ:GOOGL) also saw significant gains, up over 2%. Chip stocks generally performed well, with Advanced Micro Devices Inc (NASDAQ:AMD) up over 3% and Marvell Technology Inc (NASDAQ:MRVL) rising over 2%. However, ON Semiconductor Corporation (NASDAQ:ON) plunged over 15%, forecasting a lower-than-expected Q3 gross margin [2].

The Fed's September meeting is priced in with an 88.1% chance of a 25 basis point rate cut, according to Federal funds futures prices. The recent dismal payroll and ISM manufacturing reports have bolstered expectations of a rate cut, which is expected to support equity prices [2].

References:
[1] Investing.com. (2025). Palantir Technologies Lifts Guidance After Q2 Results Beat Wall Street Estimates. Retrieved from https://www.investing.com/news/earnings/palantir-technologies-lifts-guidance-after-q2-results-beat-wall-street-estimates-4168774
[2] Nasdaq. (2025). Stocks Climb Strength Magnificent Seven Stocks and Chip Makers. Retrieved from https://www.nasdaq.com/articles/stocks-climb-strength-magnificent-seven-stocks-and-chip-makers