Investing.com — U.S. stock index futures rose sharply in overnight trading Thursday, with gains skewed largely toward technology stocks after stronger-than-expected earnings from Microsoft and Alphabet.
While caution about inflation and interest rates in the US remained, positive earnings raised hopes that demand for artificial intelligence will continue to support technology profits in the coming quarter.
The index was the best performer among its peers, rising 1.2% to 17,778.75 points, while rising 0.8% to 5,123.25 points by 18:49 ET (22:49 GMT). Gains were much smaller, with futures rising 0.1% to 38,323.0 points.
Microsoft rises, Alphabet hits record high thanks to strong first-quarter earnings
Class A shares of Google parent Alphabet Inc (NASDAQ:) rose about 12% in after-hours trading, hitting a record high of about $174.70.
The company reported stronger-than-expected earnings in the first quarter thanks to strong demand for its new artificial intelligence offerings. Alphabet also announced its first-ever dividend, 20 cents per share.
Microsoft Corporation (NASDAQ:) shares rose 4.6% to $417.24, as strong demand for artificial intelligence products also helped the company post stronger-than-expected earnings in the first quarter.
Both stocks rebounded from a negative session on Thursday, and also helped inspire gains across the technology sector.
AI darling NVIDIA Corporation (NASDAQ:) added 2.4%, extending its recent rebound even as recent earnings from other chipmakers have raised doubts about how well the AI industry will support chip demand.
Meta Platforms Inc (NASDAQ:), which owns Facebook, saw some relief in aftermarket trading, as its stock rose 0.7% after falling 10% during the session. Meta's earnings beat expectations, but its revenue outlook was disappointing as the company took on more AI-related costs.
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Wall Street suffers losses, PCE data awaits more price signals
Wall Street indexes closed lower on Thursday after lower-than-expected data pointed to some slowdown in the economy amid rising interest rates and flat inflation.
But the index reading, a measure of overall inflation, was higher than expected for the quarter. This has reinforced already prevailing fears that the Fed will keep interest rates higher for longer to curb persistent inflation.
The GDP data puts the upcoming data, due later on Friday, squarely into focus. Personal consumption expenditures data is the Fed's preferred measure of inflation, and is likely to influence the central bank's stance on inflation.
On Thursday, it fell 0.5% to 5,048.42 points, while it closed 0.6% lower at 15,611.76 points. The index was most affected by inflation fears, as it fell by about 1% to 38,085.89 points.
Despite seeing some relief this week, Wall Street indexes are still suffering from a weak start to the second quarter, as traders price in expectations of early interest rate cuts by the Federal Reserve.
Some mixed earnings reports also impacted.
Snap rises on strong earnings and Intel chips
shares Snap Company (NYSE:) rose more than 25% in aftermarket trade after the social media company reported stronger-than-expected first-quarter earnings, while also providing an upbeat outlook.
Other social media stocks also rose after the US pushed through a bill giving video streaming app TikTok a year to either divest itself or leave US markets.
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On the other hand, Intel (NASDAQ:) fell 8% in aftermarket trade after the chipmaker reported disappointing quarterly earnings and gave a mediocre outlook for the second quarter.
