TLDR
- Dow, S&P 500, and Nasdaq futures all rose Thursday morning after mixed but broadly positive Big Tech earnings
- Alphabet and Amazon shares climbed after earnings beats; Meta and Microsoft lagged
- Four tech megacaps combined to forecast $725 billion in AI-related capital spending for 2025
- Oil prices spiked to a four-year high above $126 a barrel on Iran military concerns before pulling back below $117
- Core PCE inflation rose 0.3% in March, slightly above estimates; Q1 GDP came in at 2% annualized
US stock futures climbed Thursday morning as Wall Street processed a wave of Big Tech earnings and fresh economic data. Dow futures rose around 0.6%, while S&P 500 and Nasdaq 100 futures were both up between 0.3% and 0.7%.
The gains came after four major tech companies reported quarterly results on Wednesday. Alphabet and Amazon both beat earnings expectations, sending their shares higher. Meta and Microsoft underwhelmed investors despite solid numbers.
Meta shares fell after its capital spending came in below expectations. Microsoft slipped around 1% even after topping revenue and profit estimates.
Despite the mixed reactions, the combined AI spending outlook from the four companies reached $725 billion for the year. That figure helped lift chip stocks and kept investor sentiment positive heading into Thursday.
Apple is scheduled to report after the market closes Thursday. Markets are watching closely for any update on how AI investment is affecting its revenue.
Oil Spike Rattles Markets Before Pulling Back
Oil prices briefly hit their highest level since 2022 early Thursday. Brent crude surged 7% to above $126 a barrel after an Axios report said President Trump is considering new military options against Iran.
Prices pulled back to below $117 later in the session as the initial shock eased. The move added a layer of uncertainty to an already busy morning for markets.
The core PCE index for March, which is the Federal Reserve’s preferred inflation measure, rose 0.3% from February. That put the annual rate at 3.2%, matching forecasts on a year-over-year basis but slightly above the monthly estimate.
GDP for the first quarter grew at a 2% annualized rate, below the 2.3% consensus estimate. The data gave investors a clearer picture of where the economy stands heading into the second quarter.
Fed Holds Rates, Powell Comments on His Future
The Federal Reserve kept interest rates unchanged on Wednesday, which was widely expected. Chair Jerome Powell said he plans to serve out the remainder of his current term.
Powell’s comments came as divisions within the Fed over inflation policy remained in focus. Thursday’s PCE data added to the ongoing debate about when, or whether, rate cuts might come.
Markets are now watching Apple’s earnings closely. Investors want to see whether AI spending is translating into stronger revenue at one of the world’s most valuable companies.
The Dow, S&P 500, and Nasdaq were all tracking higher as of early Thursday morning trade.
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