US stocks were set to bounce back on Friday as Alphabet (GOOG, GOOGL) and Microsoft (MSFT) earnings revived hopes for a Big Tech-led rally even as a reading on the Federal Reserve’s preferred inflation gauge showed price pressures remain sticky.
S&P 500 (^GSPC) futures rose roughly 0.9%, while contracts on the tech-heavy Nasdaq 100 (^NDX) jumped 1%. Futures on the Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, were up 0.3%.
Gains for Alphabet and Microsoft are giving stocks a lift after Thursday’s sell-off, with rises of around 11% and 4%, respectively. The stellar results from the “Magnificent Seven” duo showed cloud revenue boosted by strong AI demand — and scope for both to benefit from that boom.
That fired up confidence that earnings from the Magnificent Seven techs can lift the broader market out of the doldrums — confidence that had taken a knock from Meta’s (META) disappointing forecast earlier in the week.
At the same time, the market took in the latest reading of the Fed’s preferred inflation gauge, the personal consumption expenditures price index for March. The “core” measure in that report, which strips out the cost of food and energy, rose 2.8% over last year, above estimates for 2.7% but unchanged from the previous annual increase.
The reading comes as Wall Street has furiously scaled back its expectations for Fed rate cuts this year. Already, since the start of the year, traders have recalibrated their bets from seven to just one.
In other individual movers, Snap (SNAP) shares rocketed up 26% in premarket trading as Wall Street welcomed signs a revamp of its digital ad business is finding takers in its after-hours report.
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