Dow Jones & Nasdaq 100: Asian Markets Gain as US Futures Rebound

AI displacement fears and tariff shocks expose US equity markets to near-term volatility. US stock futures steadied during the Asian session on Tuesday, February 24, following Monday’s rout, but faced a period of uncertainty in the week ahead.

Despite Monday’s sell-off, Asian equity markets were mostly in the green on the latest US tariff developments. Notably, the Nikkei 225 advanced 0.88%, while Mainland China’s CSI 300 gained 1.33% in morning trading.

Mainland China’s equity markets gained despite the People’s Bank of China keeping Loan Prime Rates steady and increased geopolitical tensions in the Middle East.

While markets remain exposed to rising geopolitical risks, bets on an H1 2026 Fed rate cut continue to support a bullish medium-term outlook for US stock futures. Later on Tuesday, key US data and Fed chatter will influence sentiment toward the Fed’s policy stance and risk appetite.

Below, I’ll outline the key market drivers, the medium-term outlook, and the technical levels traders should watch.

People’s Bank of China Holds Rates Steady after US Supreme Court Ruling

On February 24, the People’s Bank of China kept the one-year and five-year Loan Prime Rates steady at 3.0% and 3.5%, respectively. Economists expected the PBoC to stand pat after a positive end to 2025 and a pickup in economic momentum in early 2026.

Market optimism that Beijing would deliver further monetary policy support limited the impact on risk sentiment.

Geopolitical Tensions Send Crude Oil Prices North

While markets consider the latest US Supreme Court ruling on Trump’s tariffs and Beijing’s policy stance, the threat of a US military strike on Iran sent WTI Crude Oil prices higher. Iran and the US are slated to return to the negotiating table on Thursday, February 26. However, the threat of a US military strike would intensify if talks fail to yield a deal on uranium enrichment and Iran’s ballistic missiles.

WTI Crude Oil climbed 1.14% to $66.8 in morning trading, hovering near seven-month highs, reflecting increased geopolitical risk.

US Consumer Sentiment and the Fed in Focus

US futures saw modest gains during the Asian session on February 24. The Dow Jones E-mini climbed 66 points, while the Nasdaq 100 E-mini and the S&P 500 E-mini advanced 112 points and 19 points, respectively.

Later in Tuesday’s session, US labor market and consumer confidence figures will influence expectations of a June Fed rate cut. Economists expect the CB Consumer Confidence Index to rise from 84.5 in January to 87.3 in February. A pickup in confidence could signal an upswing in consumer spending and demand-driven inflation.

However, ADP employment figures are likely to have more influence on sentiment. A weak reading would suggest looser labor market conditions. Rising unemployment would cool wage growth and consumer spending, dampening demand-driven inflation. A softer inflation outlook would support a more dovish Fed rate path.

Beyond the data, traders should closely monitor FOMC members’ insights into the US labor market, inflation, and monetary policy. Growing support for a June rate cut would boost demand for US stock futures.

According to the CME FedWatch Tool, the probability of a June Fed cut rose from 53.5% on February 20 to 56.4% on February 23. Currently, markets expect two Fed rate cuts in 2026, with a year-end target rate of 3.00%-3.25%, which remains key to the bullish medium- to longer-term outlook for US stock futures.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Despite the morning gains, the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini remained below their 50-day EMAs, while holding above their 200-day EMAs. The EMA positions indicated a bearish near-term but bullish longer-term outlook. While technicals supported a cautiously bearish near-term outlook, rate cut hopes aligned with the longer-term technicals and the bullish medium-term projection.

Near-term trends hinge on the incoming Trump’s tariff policies, US economic data, central bank rhetoric, and Middle East developments. Key levels to monitor include:

Dow Jones

• Resistance: the 50-day EMA (49,060), the February 10 record high of 50,611, and then 51,000.
• Support: 48,500.

Nasdaq 100

• Resistance: 25,000, the 50-day EMA (25,305), and then the October 30 record high of 26,399.
• Support: 24,500 and then the 200-day EMA (24,153).

S&P 500

• Resistance: the 50-day EMA (6,901) and then the January 13 high of 7,036.
• Support: 6,750 and then the 200-day EMA (6,592).

Outlook: US Economic Data Key to Bullish Sentiment

In my opinion, the short-term price outlook remains cautiously bullish. Meanwhile, ongoing expectations of a June Fed rate cut reaffirm the bullish medium-term outlook. These favorable fundamentals align with longer-term technicals for US stock futures.

However, several scenarios would likely challenge the bullish medium-term outlook, including:

• A full-blown US-Iran conflict.
• The Bank of Japan declares a higher-than-expected neutral interest rate (hawkish: potentially 1.5%-2.5%). Narrowing rate differentials could trigger a yen carry trade unwind as seen in mid-2024. Reduced liquidity would weigh on US risk assets. Such a scenario would invalidate the cautiously bullish short-term outlook.
• US economic indicators and the Fed temper rate cut bets.

Conclusion: Bullish Bias Remains Intact

In summary, rising expectations of multiple Fed rate cuts in 2026 and a cautiously hawkish BoJ reaffirm the medium-term outlook for US stock futures. However, a surprise BoJ or Fed hawkish shift would weigh on sentiment. Significantly, ongoing expectations of multiple Fed rate cuts may hinge on an H1 2026 rate cut, underscoring the significance of incoming US data for risk assets.

Despite the ongoing risk of yen carry trade unwinds and a potential US-Iran conflict, US stock futures may target new highs if the Fed signals a June cut. Lower borrowing rates would increase market liquidity, countering yen carry trade unwind drains, supporting a bullish longer-term outlook.

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