Yes! Did you know your dog can sense everything about you? Through both sensory perception and their visual ability, a dog is able to ascertain if you are fearful, happy, worried or even angry.
Dogs are experts at reading human faces and gestures In John Bradshaw's book "In Defense of Dogs" he states "Dogs seem fascinated by peoples eyes and faces; they will follow the direction of their owners gaze almost as reliably as they will follow pointing". Recent studies have found that when your dog gives you long and lingering eye contact it is their way of saying "I love you"!
Dogs will react differently to the mood we are in as well - if fearful, they may react the same way or protect you. I experienced this first hand recently when my German Shepherd, Luther, had a close encounter with an Eastern Brown snake (the second most venomous land snake in the world) on our farm. I managed to call him away from the snake and bring him into the house. I was obviously reacting in a fearful manner (bit of an understatement!) I sat down on the patio to gather myself, he then came up to me, quietly laid at my feet and proceeded to hug his body tightly around my legs, so tight in fact I was unable to stand up for several minutes. I perceived his reaction as empathy - wanting to protect or comfort me! I love this dog ....
When out and about, dogs can also feel fear or apprehension from their owner when approaching other dogs or situations they may not feel confident about. This feeling can cause a chain reaction by the owner to the dog. Dog trainers always reiterate that it is important not to work or train a dog if we are in an angry or heightened state as this will be transmitted to the dog and affect training as well.
Dogs are capable of recognizing and reacting to our facial expressions, emotions and even our scent and the one indisputable emotion they have for their owners is feeling love and contentment when they are with us.