S&P 500 futures pop in overnight trading, boosted by Alphabet and Microsoft: Live updates
S&P 500 futures rose in overnight trading Thursday as Big Tech names Alphabet and Microsoft saw shares rally on strong earnings.
Futures linked to the broad market index climbed 0.7%, and Nasdaq 100 futures popped 1%. Futures on the Dow Jones Industrial Average gained 30 points, or 0.08%.
Shares of Alphabet jumped 11% in extended trading following a better-than-expected first-quarter earnings The company also authorized its first ever dividend, as well as a $70 billion buyback.
Microsoft saw shares climb 4% after the software maker posted fiscal third-quarter results that surpassed Wall Street’s expectations.
The strength in these megacap stocks could give the major averages a boost after a losing day on Wall Street. The blue-chip Dow slid 375 points Thursday, while the S&P 500 and the Nasdaq Composite dropped 0.5% and 0.6%, respectively.
Thursday’s sell-off was triggered by new U.S. economic data that showed a sharp slowdown in growth and pointed to persistent inflation. Gross domestic product expanded by 1.6% in the first quarter, compared to a Dow Jones forecast of 2.4%. Meanwhile, the personal consumption expenditures price index for the period rose at a 3.4% pace, well above the previous quarter’s 1.8% increase.
“The Fed will be more concerned by inflation running above their target in the first quarter than slower growth,” said Bill Adams, chief economist at Comerica Bank. “The Fed is likely to slow the pace of their balance sheet runoffs at one of the next few meetings, but wait until September to start reducing interest rates.”
Still, major averages are on track for a winning week. The S&P 500 is up 1.6% week to date, on pace to break a three-week losing streak. The Nasdaq has gained more than 2%, headed for its first positive week in five. The Dow is up by a more modest 0.3% this week.
So far, about 38% of the S&P 500 companies have reported quarterly results, and nearly 80% of those beat earnings expectations.
Investors are waiting for more earnings from big energy firms Chevron and Exxon Mobil Friday before the bell.
On the economic data front, March’s PCE reading will also be out on Friday morning. This inflation gauge is closely watched by the Fed.
Fed’s preferred inflation gauge for March will be out Friday
The personal consumption expenditures price index will be due on Friday morning, giving the Federal Reserve a detailed glimpse into the latest inflation metrics.
For March, economists polled by Dow Jones anticipate headline PCE grew 0.3% from the prior month and by 2.6% from 12 months earlier. They expect that core prices, which exclude food and energy costs, grew by 0.3% on a monthly basis and by 2.7% year over year.
The first-quarter gross domestic product report issued Thursday revealed that PCE for the period rose by 3.4%, well above the 1.8% increase in the fourth quarter. The result incited a sell-off for stocks as investors fretted over signs of stagflation – a scenario in which the economy’s growth slows but inflation rises.
–Darla Mercado
After hours movers
Check out the companies making moves after the bell:
Snap – Shares soared more than 27% in afterhours trading after the social media firm reported first-quarter results that beat analysts’ estimates.
Intel – The tech stock slid 8% in extended trading after the company missed expectations for first-quarter sales and gave a weak forecast for the current quarter.
Dexcom – The manufacturer of glucose monitoring systems fell 8%, even as the company posted beats on the top and bottom lines.
Gilead Sciences – The biotech stock jumped almost 3% after a better-than-feared quarterly report. Gilead posted a loss of $1.32 per share, narrower than a loss of $1.49 per share expected by analysts polled by LSEG.
— Yun Li