US stocks are expected to rise on Thursday, as investor confidence was boosted by a well-received set of earnings from three of the four ‘Magnificent Seven’ tech giants, offsetting concern about a further surge in oil prices.
Dow Jones futures were up 0.6%, with gains of 0.5% and 0.3% predicted for the Nasdaq and the S&P 500.
The tone is being set by the busy round of after-hours tech earnings.
According to market reaction, results from Microsoft, Amazon and Alphabet were broadly strong, particularly in cloud computing, which continues to be a key driver of growth as companies invest heavily in artificial intelligence infrastructure.
Alphabet Inc (NASDAQ:GOOG) jumped sharply after beating expectations, with the premarket gain now 9.2%. Amazon.com Inc (NASDAQ:AMZN) delivered its fastest cloud growth in more than three years, pushing its shares up 3%.
Microsoft Corp (NASDAQ:MSFT) shares are down 1.7% in premarket trading, despite reporting 39% growth in its Azure cloud unit, reinforcing the link between AI spending and revenue generation.
Meta Platforms Inc (NASDAQ:META) was the outlier, down 9.2% premarket, after flagging $135-145 billion of spending, raising concerns about the scale and focus of its investment strategy.
The positive tech backdrop is helping offset macro concerns. Oil prices remain elevated, with WTI crude having surged above $110 a barrel overnight, keeping inflation risks in focus and limiting broader market enthusiasm. Prices have eased since the early hours, with futures contracts rolling over to the next month.
“The S&P 500 can extend its advance to new all-time highs after earnings from hyperscalers offered a positive AI narrative, Wall Street’s most potent driver,” said market analyst Nikos Tzabouras at Tradu.
He said markets had been betting that the Middle East conflict would not derail the march of AI, and the results “vindicated that view”, with commitments to AI infrastructure spend showing no signs of wavering.
“Coupled with mostly strong growth pointing to tangible AI monetisation, the results could go a long way to quashing fears over ballooning capital expenditure.”
Meanwhile, Meta, he said, offers “a cautionary tale”.
On today’s earnings slate, Apple headlines after the close, while Eli Lilly, Mastercard, Caterpillar, Merck and ConocoPhillips report before the open, with further after-hours updates due from Amgen, SanDisk, Western Digital and Stryker.
