Alphabet (Google) and Microsoft Earnings Surge; Key PCE Data on the Horizon: Market Movers

Alphabet and Microsoft Earnings Surge; Key PCE Data on the Horizon: Market Movers

U.S. Stock Market Set to Rally on Earnings and Inflation Data

As the week draws to a close, U.S. stock market futures are showing positive movement, bolstered by notable earnings reports from tech giants Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT). Investors are also closely watching the upcoming U.S. inflation data expected later today, which could influence the Federal Reserve’s future monetary policy actions.

1. Positive Movement in Futures
In New York, stock futures saw a modest rise on Friday morning, reflecting investor reactions to significant earnings announcements from leading technology firms and the anticipation of crucial inflation statistics. As of 03:30 ET (07:30 GMT), the futures for the Dow Jones Industrial Average had climbed by 48 points or 0.1%, while S&P 500 futures had gained 39 points or 0.8%. Nasdaq 100 futures were up by 188 points or 1.1%.

Yesterday, Wall Street indices closed lower following a report showing weaker-than-expected U.S. economic growth in Q1. This data, alongside ongoing high inflation, tempered expectations that the Federal Reserve might reduce interest rates later this year.

2. Tech Stocks in the Limelight
Post-market trading saw Alphabet’s shares surge after the company exceeded first-quarter revenue forecasts and declared an inaugural dividend of 20 cents per share. The tech behemoth recorded a revenue of $80.5 billion, up from last year’s $69.8 billion, surpassing the expected $78.7 billion. This increase was partially driven by robust demand for AI technologies on its Azure platform, with earnings per share reaching $1.89, above the forecasted $1.51.

Microsoft also reported higher-than-expected earnings and revenue, fueled by its early investments in AI, including a $13 billion stake in OpenAI. The company’s shares responded positively after hours.

3. Snap Inc.’s Strong Performance
Snap’s shares jumped in after-hours trading following a report that surpassed revenue and user engagement forecasts. The company announced a quarterly revenue of $1.2 billion, a 21% increase from the same period in 2023, and above the expected $1.12 billion. Daily active users on Snapchat rose to 422 million, topping estimates of 419.6 million.

4. Upcoming Inflation Data
The March personal consumption expenditures (PCE) price index, a critical indicator of U.S. inflation, is expected to show mixed results. Economists predict the monthly index to remain stable at 0.3%, with the annualized rate potentially increasing to 2.6% from 2.5%. This data is crucial as it could affect the Federal Reserve’s rate adjustment strategy amid ongoing economic pressures.

5. Oil Prices Poised for Weekly Gains
Oil prices edged higher in European trading on Friday, heading towards a weekly gain amidst potential supply constraints and ongoing geopolitical tensions in the Middle East. Brent crude futures rose by 0.7% to $89.67 a barrel, and West Texas Intermediate crude also increased by 0.7% to $84.15 per barrel.

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