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By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -U.S. stock index futures rose on Thursday, powered by Magnificent Seven heavyweights Microsoft and Meta as their strong quarterly results pointed to a resilient outlook for the technology sector.
Microsoft surged nearly 9% in premarket trading after it forecast stronger-than-expected quarterly growth for its cloud-computing business Azure. Meta Platforms gained 6.3% after posting higher-than-expected revenue on the back of strong advertising performance.
"This is exactly the type of result you want to see - solid fundamentals with plenty of long-term promise ... Microsoft's not just riding the AI wave, it's driving it," said Josh Gilbert, market analyst for eToro.
"Meta is hitting the nail on the head, and its increased capex guidance for the year ahead shows its confidence in its AI efforts," Gilbert said.
Strong results from the two megacaps helped calm jitters over an increasingly uncertain outlook for businesses and the economy due to sweeping and often erratic shifts in the U.S. tariff policy and an escalating trade war with China.
Many companies have trimmed or even pulled their forecasts. Still, S&P 500 earnings are expected to grow at 11.5% in the first quarter, as per LSEG data on Wednesday, up from the 7.8% growth forecast at the start of April.
Data on Wednesday also showed the U.S. economy contracted in the first quarter for the first time in three years. Despite signs of a weakening economy, Federal Reserve policymakers have signaled that short-term interest rates will remain unchanged barring clear data showing slowing inflation or a deteriorating labor market.
At 07:05 a.m. ET, Dow E-minis were up 327 points, or 0.80%, S&P 500 E-minis were up 69.25 points, or 1.24% and Nasdaq 100 E-minis were up 360.5 points, or 1.83%.
Other technology megacaps also rose, with Nvidia up 4.9% and Alphabet gaining 1.3%.
Amazon.com and Apple are scheduled to report after the market closes on Thursday.
Apple shares slipped 1.1% after a federal judge ruled the iPhone maker had violated a U.S. court order to reform its App Store. Amazon shares were up 3.9%.
Among other earnings, Eli Lilly lost 4% after its quarterly results, while McDonald's dipped 2.7% after posting a surprise drop in first-quarter global sales.
General Motors gained 2.8% after offering a new 2025 forecast for core profit following some clarity on automotive tariffs. It had pulled its previous forecast earlier this week.
The day's economic data docket is also heavy with weekly jobless claims, manufacturing PMIs and construction spending.