Wall Street’s main indices are expected to open higher today, boosted by strong quarterly results from tech giants Alphabet and Microsoft. This rise in growth stocks is accompanied by encouraging signs of progress in managing inflation, reviving hopes of a possible interest rate cut later this year.
Alphabet’s premarket trading soared 11.7% following the announcement of its inaugural dividend and a $70 billion share buyback. The company beat expectations with its first-quarter results, boosting its market value potentially to more than $2 trillion if premarket gains persist.
Adding to the positive momentum, Microsoft saw a 3.9% increase after beating Wall Street projections for revenue and earnings for the third quarter. The growth was driven by increased adoption of artificial intelligence (AI) within its cloud services.
Amazon.com and Nvidia also saw gains, rising 3.0% and 2.0%, respectively, in response to strong earnings reports. Similarly, MetaPlatforms recovered slightly, gaining 0.3% after a significant 11% drop in the previous session.
Additionally, the release of the March Personal Consumption Expenditures (PCE) Price Index provided additional optimism. The index rose 0.3%, meeting economists’ expectations. Year over year, PCE inflation rose 2.7%, slightly exceeding forecasts.
However, the data did not significantly alter the Federal Reserve’s inflation outlook. While suggesting a positive trajectory, concerns remained about meeting the 2% target sustainably.
Following the data release, money markets adjusted their expectations, indicating a higher likelihood of a rate cut in September. This adjustment caused the yield on the benchmark 10-year Treasury bond to decline.
Despite Exxon Mobil’s 1.6% decline due to a 28% drop in first-quarter earnings, social media company Snap rose 24.9% after beating revenue and user growth estimates for the quarter. Similarly, Pinterest saw its stock rise 4.2%.
However, Intel saw an 8.5% drop in premarket trading after forecasting second-quarter revenue and earnings below expectations. The company faces challenges in meeting demand for traditional PC chips and data centers, lagging behind in the AI ​​components market.
Overall, upbeat earnings reports across several sectors this week have boosted Wall Street’s major stock indexes. The S&P 500 and Nasdaq are set to end their losing streaks, offering hope for a positive end to the week.
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