Positive Earnings Propel Stock Futures Higher Ahead of Key Inflation Data

by Jennifer

U.S. stock futures surged early as investors welcomed upbeat earnings reports from Alphabet and Microsoft, while gearing up for crucial inflation data.

Early trading saw S&P 500 futures rising by 0.7%, Nasdaq 100 futures jumping 0.9%, and Dow Jones Industrial Average futures edging up by 0.1%.


Thursday witnessed a decline across all major stock indexes, following weaker-than-expected U.S. gross domestic product data that unveiled a surge in core inflation during the first quarter. Market sentiment also reflected a reduced likelihood of a rate cut by September, dropping to 59% from 70% the previous day, according to CME’s FedWatch tool.


Focus remains on inflation data, particularly the release of the core personal consumption expenditures (PCE) index, the Federal Reserve’s preferred metric, due on Friday.

Despite Meta Platforms’ disappointing earnings on Thursday, Friday’s outlook appears brighter, especially for Big Tech, as Microsoft and Alphabet surpassed earnings expectations, propelling Alphabet’s stock 11% higher in after-hours trading. The broader tech sector received a boost, contributing to the outperformance of Nasdaq 100 futures.

However, amid the earnings optimism, attention turns to the core PCE reading, expected to show a 2.7% year-over-year rise in March. Yet, estimates might require revision following Thursday’s GDP data, which revealed a 3.7% increase in quarterly PCE figures for the first three months of the year, surpassing previous estimates of 3.4%.

Deutsche Bank strategist Jim Reid noted that regardless of how the numbers are interpreted, the current inflation momentum may not align with the Fed’s comfort level for rate cuts.

Early trading witnessed a decline in bond yields after reaching 2024 highs on Thursday post the U.S. GDP data. The yield on the 10-year Treasury note dropped by 2 basis points to 4.686%.

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