U.S. stocks rebounded on Friday as earnings from Alphabet ( GOOG , GOOGL ) and Microsoft ( MSFT ) renewed hopes for a big tech-led rally, even as a reading of the Federal Reserve's preferred inflation measure showed price pressures lingering.
S&P 500 (^GSPC) futures rose roughly 0.9%, while tech-heavy Nasdaq 100 (^NDX) contracts rose 1%. Futures for the Dow Jones Industrial Average ( ^DJI ), which covers fewer tech stocks, rose 0.3%.
Profits for Alphabet and Microsoft rose 11% and 4%, respectively, after Thursday's sell-off, lifting shares. The “Magnificent Seven” duo's stellar results showed strong AI demand boosted cloud revenue — and the opportunity for both to benefit from that boom.
That fueled hopes that earnings from Magnificent Seven Technologies would lift the broader market out of the doldrums — 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 central bank's preferred inflation gauge, the Personal Consumption Expenditure Price Index for March. The “key” measure in the report, which strips out the cost of food and energy, rose 2.8% from a year ago, above estimates of 2.7% but unchanged from the year-ago increase.
The reading comes as Wall Street aggressively downgraded expectations for Fed rate cuts this year. Already, since the beginning of the year, traders have adjusted their bets seven to one.
In other individual moves, Snap ( SNAP ) shares jumped 26% in premarket trading, as Wall Street welcomed signs that a restructuring of its digital advertising business was finding takers in its after-hours report.
