May 1 (Reuters) - U.S. stock index futures rose on Thursday, powered by Magnificent Seven heavyweights Microsoft and Meta as their strong quarterly results pointed to a resilient outlook for the technology sector.
Microsoft (MSFT.O), surged nearly 9% in premarket trading after it forecast stronger-than-expected quarterly growth for its cloud-computing business Azure. Meta Platforms (META.O), gained 6.3% after posting higher-than-expected revenue on the back of strong advertising performance.
"This is exactly the type of result you want to see - solid fundamentals with plenty of long-term promise ... Microsoft's not just riding the AI wave, it's driving it," said Josh Gilbert, market analyst for eToro.
"Meta is hitting the nail on the head, and its increased capex guidance for the year ahead shows its confidence in its AI efforts," Gilbert said.
Strong results from the two megacaps helped calm jitters over an increasingly uncertain outlook for businesses and the economy due to sweeping and often erratic shifts in the U.S. tariff policy and an escalating trade war with China.
Many companies have trimmed or even pulled their forecasts. Still, S&P 500 earnings are expected to grow at 11.5% in the first quarter, as per LSEG data on Wednesday, up from the 7.8% growth forecast at the start of April.
Advertisement · Scroll to continueData on Wednesday also showed the U.S. economy contracted in the first quarter for the first time in
three years. Despite signs of a weakening economy, Federal Reserve policymakers have signaled that short-term interest rates will remain unchanged barring clear data showing slowing inflation or a deteriorating labor market.
At 07:05 a.m. ET, Dow E-minis were up 327 points, or 0.80%, S&P 500 E-minis were up 69.25 points, or 1.24% and Nasdaq 100 E-minis were up 360.5 points, or 1.83%.
Other technology megacaps also rose, with Nvidia (NVDA.O), up 4.9% and Alphabet (GOOGL.O), gaining 1.3%.
Amazon.com (AMZN.O), and Apple (AAPL.O), are scheduled to report after the market closes on Thursday.
Apple shares slipped 1.1% after a federal judge ruled the iPhone maker had violated a U.S. court order to reform its App Store. Amazon shares were up 3.9%.
Among other earnings, Eli Lilly (LLY.N), lost 4% after its quarterly results, while McDonald's (MCD.N), dipped 2.7% after posting a surprise drop in first-quarter global sales.
General Motors (GM.N), gained 2.8% after offering a new 2025 forecast for core profit following some clarity on automotive tariffs. It had pulled its previous forecast earlier this week.
The day's economic data docket is also heavy with weekly jobless claims, manufacturing PMIs and construction spending.
Despite choppy intraday trading, the S&P 500 has managed to close higher for the past seven sessions, a winning streak last seen in late November. The benchmark index and the Dow notched monthly losses in April, while the Nasdaq rose slightly.
Mobile chip designer Qualcomm (QCOM.O), was one of the latest firms to forecast a hit to revenue from the trade war. Its shares fell 5.4%.
Robinhood (HOOD.O), rose 3.6% after higher volumes amid volatile markets lifted the trading platform's profit above forecasts.
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty
