- Microsoft's forecast for current-quarter sales and cloud growth exceeded expectations, leading to a significant rise in its stock price.
- U.S. stock index futures rose following a sharp selloff, driven by uncertainty surrounding the Federal Reserve's policy outlook.
- Traders currently see a 63% chance that the U.S. central bank will raise interest rates by 25 basis points at its September meeting.
- U.S. equity futures rose as a jump in Microsoft and semiconductor stocks helped futures rebound from the prior day's selloff when the Federal Reserve decided to hold rates steady.
- Investors are closely watching for the next inflation data point, with the release of the Personal Consumption Expenditures (PCE) index for June expected soon.
U.S. stock index futures surged on Thursday, recovering from a previous selloff driven by uncertainty surrounding the Federal Reserve's policy. This rebound was largely fueled by Microsoft's impressive earnings forecast, which alleviated investor concerns regarding substantial AI spending. Microsoft shares jumped 9% in premarket trading after reporting better-than-expected current-quarter sales and cloud growth, alongside a capital expenditure outlook that fell below Wall Street estimates. The company anticipates continued cash generation through its fiscal 2027.3
Futures for the Dow Jones Industrial Average rose 0.2%, while the S&P 500 increased 0.4%. The Nasdaq-100 saw a notable jump of 0.7%, recovering from heavy declines in chip stocks. Traders are currently assessing a 63% chance of a 25-basis point rate hike by the Federal Reserve in September, as they await the release of the Personal Consumption Expenditures (PCE) index for June, a key inflation data point.457
Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, noted that a rate change in September remains a possibility, as the Federal Reserve continues to monitor economic data to determine if inflation is still a concern. The bond market reacted to the Fed's decision, pushing the 30-year Treasury yield to nearly 5.24% on Thursday.
“Microsoft shares rose 8.5% after the company projected steady capital expenditures for fiscal 2026, indicating strong demand across its portfolio. Meanwhile, traders are closely monitoring the upcoming Personal Consumption Expenditures index release, which could influence the Federal Reserve's interest rate decisions.”
finance.yahoo.com
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