Dow Jones futures rebounds on strong Alphabet's earnings, hopes of US-EU deal

• Dow Jones futures gains ground after a significant fall on Thursday, after a strong earnings report from Alphabet Inc.
• The US-EU tariff deal hopes have kept market sentiment upbeat.
• Investors await the Fed's monetary policy, which will be announced on Wednesday.

Dow Jones futures trade slightly higher at the start of the European session on Friday. The 30-stock basket rebounds on strong guidance by tech-giant Alphabet and increasing investors' confidence that the United States (US) and the European Union (EU) will reach a trade agreement before the tariff deadline on August 1.

At the time of writing, Dow Jones futures trade 0.1% higher to near 44,750. S&P 500 futures gain 08 points and ticks up to near 6,370.

The 30-stock basket fell 0.7% in Thursday's session after shares of leading automaker Tesla plunged almost 8% on poor earnings show and rough guidance. Meanwhile, S&P 500 and NASDAQ gained sharply after Alphabet reported 14% revenue growth in second-quarter earnings and guided a significant chunk of capital expenditure in Artificial Intelligence (AI).

On the global front, hopes of a tariff deal between the US and the European Union (EU) have also come in as relief for investors. A report from the Financial Times (FT) showed on Wednesday that officials from both economies are close to signing a tariff deal, whose terms would mirror the US-Japan pact. Earlier this week, US President Donald Trump confirmed an agreement with Japan and reduced the baseline and automobile tariff rate to 15%.

Signs of global economic tensions easing often lead to an increase in the risk appetite of investors. Meanwhile, the US Dollar (USD) has also extended its Thursday recovery move on US-EU trade deal hopes. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, rises to near 97.60.

Going forward, the major trigger for the US market will be the Federal Reserve's (Fed) monetary policy announcement on Wednesday. As the Fed is widely anticipated to leave interest rates steady in the range of 4.25%-4.50%, investors will closely monitor comments from Chair Jerome Powell about the impact of tariffs on inflation in the near-term and longer horizon, and the likely monetary policy action in the remainder of the year.