U.S. equity futures edged higher on Monday as Wall Street looked to build on last week’s powerful rebound, capped by the Dow Jones Industrial Average’s historic close above 50,000. The milestone marked a sharp reversal from a bruising, tech-led selloff earlier in the week and has set an optimistic, if cautious, tone as investors head into a dense stretch of economic data and corporate earnings.

Dow at 50,000 Reframes Market Sentiment

Friday’s rally was emphatic. The Dow Jones Industrial Average surged more than 1,200 points, or 2.5%, securing its first-ever close above the 50,000 level after briefly crossing the threshold intraday. The S&P 500 and the Nasdaq Composite each gained around 2%, recovering much of the ground lost during a volatile week dominated by concerns over stretched valuations and accelerating AI spending.

Monday’s futures action reflects that momentum, with modest gains across major contracts suggesting investors are willing to cautiously add risk. Still, the advance comes against a backdrop of lingering division beneath the surface, particularly between resilient industrial and financial names and more fragile technology shares.

Tech Rebound Meets AI Spending Anxiety

Technology stocks remain at the center of the debate. Last week’s selloff was driven in large part by software shares, as markets digested the implications of escalating AI investment with uncertain near-term returns. Companies including Amazon, Alphabet, Meta, and Microsoft are collectively planning roughly $650 billion in capital expenditures as they race to build AI infrastructure.

That scale of spending has forced investors to reprice risk. While Friday’s rally suggests dip-buying appetite remains alive, skepticism persists over whether massive AI outlays will translate into sustainable profit growth or simply weigh on margins in the near term.

Macro Data Takes Center Stage

The durability of the rebound will likely hinge on this week’s macro releases. The delayed January employment report is due Wednesday after being pushed back by the partial government shutdown. Expectations have been tempered after ADP data showed just 22,000 private-sector job additions last month, a sharp slowdown from a year earlier.

Friday brings the January consumer price index, another release postponed by the shutdown. Together, the jobs and inflation data will help shape expectations for Federal Reserve policy at a time when leadership uncertainty is already complicating the outlook.

Earnings and the Fed Outlook Intersect

Corporate results will add another layer of complexity. Earnings from Coca-Cola, McDonald’s, Cisco, and ON Semiconductor will offer insight into consumer demand, enterprise spending, and global supply chains.

At the same time, markets are weighing how monetary policy could evolve under President Donald Trump’s nominee to succeed Jerome Powell, former Fed governor Kevin Warsh. Although Warsh is widely seen as a hawk, his nomination provided only a fleeting boost to the dollar, which remains sharply lower since Trump took office.

What to Watch Next

With the Dow at record highs, the bar for positive surprises has risen. Strong data could validate the rally and reinforce confidence in U.S. growth, while any negative shock on jobs or inflation risks reviving volatility. For now, markets are pressing ahead — but with eyes firmly fixed on the data that will determine whether the 50,000 milestone is a launching point or a near-term peak.