TLDR
- Dow Jones, S&P 500 and Nasdaq futures rose Thursday morning after mixed but broadly positive earnings for big technology companies.
- Alphabet and Amazon shares rose after earnings beat. Meta and Microsoft lagged behind
- Four tech giants come together to forecast $725 billion in capital spending on AI for 2025.
- Oil prices rose to a four-year high above $126 a barrel on Iranian military concerns before falling below $117.
- Core PCE inflation rose 0.3% in March, slightly above estimates; Q1 GDP came in at 2% year over year
US stock futures rose Thursday morning as Wall Street processed a wave of Big Tech earnings and new economic data. Dow Jones futures rose about 0.6%, while S&P 500 and Nasdaq 100 futures rose between 0.3% and 0.7%.
The gains came after four major technology companies announced their quarterly results on Wednesday. Both Alphabet and Amazon beat earnings expectations, sending their shares soaring. Meta and Microsoft have disappointed investors despite the strong numbers.
Meta stocks It declined after capital spending fell short of expectations. Microsoft It fell about 1% even after beating revenue and earnings estimates.
Despite the mixed reaction, the combined AI spending forecast from the four companies reached $725 billion for this year. The figure helped lift chip stocks and kept investor sentiment positive through Thursday.
Apple is scheduled to report after the market closes on Thursday. Markets are closely monitoring any update on how investing in AI will impact their revenues.
Oil rise shakes markets before retreat
Oil prices It briefly hit its highest level since 2022 early Thursday. Brent crude rose 7% to exceed $126 a barrel after an Axios report said President Trump is considering new military options against Iran.
Prices fell below $117 later in the session as the initial shock subsided. The move added a layer of uncertainty to an already busy morning for the markets.
The March core personal consumption expenditures index, the Fed’s preferred measure of inflation, rose 0.3% from February. This brings the annual rate to 3.2%, which is in line with expectations on an annual basis but slightly higher than the monthly estimate.
First-quarter GDP grew at an annualized rate of 2%, below consensus estimates of 2.3%. The data gave investors a clearer picture of where the economy is headed in the second quarter.
The Fed keeps interest rates on hold, and Powell comments on its future
The Federal Reserve kept interest rates unchanged on Wednesday, which was widely expected. President Jerome Powell said that he intends to complete the remainder of his current term.
Powell’s comments came amid continued focus on divisions within the Federal Reserve over inflation policy. Thursday’s personal consumption expenditures data added to the debate over when or whether interest rates will be cut.
Markets are now watching Apple’s earnings closely. Investors want to know whether spending on artificial intelligence translates into stronger revenues at one of the world’s most valuable companies.
The Dow Jones, S&P 500 and Nasdaq indexes rose in early morning trading Thursday.
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