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Futures up: Dow 0.08%, S&P 500 0.05%, Nasdaq 0.07%

Oct 10 (Reuters) - U.S. stock index futures edged higher

on Friday, signaling a rebound after a brief pause as investors

refocused on AI-driven momentum that has steered markets this

year, while awaiting consumer sentiment data for fresh clues on

the economy.

While the earnings season that begins next week will be a

crucial litmus test for U.S. stock markets, traders so far have

brushed off concerns about a bubble in equities.

Some analysts believe the AI trade, so far mostly

concentrated in tech, will spill over into energy and

construction firms as demand for data center buildout

accelerates.

"I feel pretty confident that AI will broaden out to other

areas of the market. Investors are going to realize that the

companies that provide or create AI are one thing, but companies

that will be the beneficiaries are equally, if not more,

important," said Franics Gannon, co-chief investment officer at

Royce Investment Partners.

Also adding to the run is the fear of missing out, as some

analysts say the nearly three-year-old bull market still has

room to run, especially if the Federal Reserve continues to

lower interest rates.

Recent data has reinforced expectations for easing. The

government shutdown has delayed official releases but proxies

point to a weakening labor market, with layoffs tied to the

impasse likely to deepen the strain.

At 05:20 a.m. ET, Dow e-minis were up 37 points, or

0.08%, U.S. S&P 500 E-minis rose 3.5 points, or 0.05%

and Nasdaq 100 E-minis inched up 16.5 points, or 0.07%.

A preliminary reading of the University of Michigan's

consumer sentiment survey, which is due at 10:00 a.m. ET, will

be in focus. It could carry extra weight because of the official

data blackout.

Investors are also weighing developments in the Middle East,

where Israeli troops began pulling back from some parts of Gaza

on Friday under a ceasefire deal with Hamas. Signs of easing

tensions could lift sentiment by removing a long-standing

overhang on equities.

Among stocks, Intel ( INTC ) rose 1.7% premarket after TD

Cowen raised its price target on the stock, while data center

operator Applied Digital ( APLD ) surged 24.3% a day after

posting better than expected revenue for the first quarter.

Levi Strauss shares slipped 7.2% after its annual

profit forecast fell short of expectations.

(Reporting by Niket Nishant in Bengaluru; Editing by Anil

D'Silva)