July 31 (Reuters) - Wall Street futures pointed to a strong start on Thursday, as blockbuster earnings from Meta and Microsoft signaled Big Tech's hefty artificial intelligence bets were paying off.
Meta Platforms (META.O), soared 11.4% in premarket trading after the social media giant forecast third-quarter revenue well above estimates, thanks to AI boosting its core advertising business.
Microsoft (MSFT.O), issued a record capital spending outlook of $30 billion for the current quarter and reported higher-than-expected sales in its Azure cloud computing business. The stock surged 8.8% before the bell.
Other tech heavyweights Amazon (AMZN.O), and Nvidia (NVDA.O), also climbed 3.1% and 2.3%, respectively, while Microsoft was on track to hit a $4 trillion market capitalization for the first time.
At 08:40 a.m. ET, S&P 500 E-minis were up 61.25 points, or 0.96%, Nasdaq 100 E-minis were up 326.75 points, or 1.39%, and Dow E-minis were up 117 points, or 0.26%.
A Commerce Department report showed the Personal Consumption Expenditure price index rose 0.3% in June, in line with estimates by economists polled by Reuters. Annually, it stood at 2.6% against estimates of 2.5%.
"We haven't seen tariffs show up in the data yet. You're seeing companies able to mitigate tariffs, whether it's by altering their supply chain, raising prices, or cutting expenses," said Stephanie Lang, chief investment officer at Homrich Berg.
"In conjunction with good demand in the market from the consumers, it's becoming a nice offset."
Separately, the number of Americans filing new applications for unemployment benefits was at 218,000 for the week of July 26, compared with estimates of 224,000, according to economists polled by Reuters.
Attention now turns to Friday's non-farm payrolls report and a looming tariff deadline, with President Donald Trump refusing to extend trade talks for lagging partners.
Easing global trade war fears, signs of U.S. economic resilience, and renewed AI optimism are behind Wall Street's monthly climb.
The S&P 500 (.SPX), and blue-chip Dow (.DJI), are set for a third straight monthly gain - their longest winning streak in nearly a year - while the Nasdaq was on track for its best month in over a year.
On Wednesday, however, the two indexes ended lower as Federal Reserve Chair Jerome Powell diluted investor expectations for an interest rate cut in September after the central bank kept rates unchanged.
Traders now see a 58.8% chance the Fed will stay pat in September as well, according to CME's FedWatch tool.
Powell said it was too early to predict a September rate cut, and that current policy was not restricting the economy. The statement came after stronger-than-expected GDP data for the second quarter.
The "hold" verdict prompted another attack on Powell by Trump, while Treasury Secretary Scott Bessent said he expected an announcement on Powell's successor by year-end.
EU officials said European liquor could face 15% tariffs from August 1 until a different agreement is reached, with talks set to continue in the fall.
Trump's deal with South Korea on Wednesday cut the country's import tariff to 15% from the previously threatened 25%.
Among other stocks, Applied Digital (APLD.O), soared 23.4% after the data center operator surpassed estimates for quarterly revenue.
Mastercard (MA.N), added 1% after reporting a higher second-quarter profit.
Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Devika Syamnath
