Oct 31 (Reuters) - S&P 500 and Nasdaq futures gained on Friday, after upbeat forecasts from Apple and Amazon helped soothe nerves a day after the indexes logged their steepest drop in more than three weeks.
Amazon's (AMZN.O), shares surged 12.45% in premarket trading, after the company forecast quarterly sales above estimates on the back of its cloud revenue, which rose at the fastest clip in nearly three years.
Apple (AAPL.O), rose 2.1%, as its forecast for iPhone sales in the holiday quarter surpassed Wall Street expectations.
With all but Nvidia (NVDA.O), among the so-called "Magnificent Seven", which makes up roughly 35% of the S&P 500's weight, having reported quarterly results, investors had a fresh look at how aggressively Big Tech was spending on artificial intelligence.
The spending spree, however, has spooked markets.
"The worry is not that these companies are spending huge amounts, but that we're not seeing the payout in the earnings just yet, and that we may not see earnings catch up with the huge amount of spending," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
On Thursday, the S&P 500 (.SPX), and Nasdaq (.IXIC), posted their steepest percentage declines since October 10, with the benchmark index closing at its lowest in more than a week.
At 07:05 a.m. ET, Dow E-minis were down 12 points, or 0.03%, S&P 500 E-minis were up 42.5 points, or 0.62%, and Nasdaq 100 E-minis were up 298.5 points, or 1.16%.
Of the 278 companies in the S&P 500 that have so far reported earnings for the third quarter, 83.1% firms have beaten analysts' expectations according to data compiled by LSEG.
MONTHLY GAINS DESPITE TEMPERED FED OUTLOOK
The tech-heavy Nasdaq was on track for its seventh consecutive monthly advance, its longest streak since May 2017. The S&P 500 and blue-chip Dow were headed for their sixth.
While expectations for faster Federal Reserve rate cuts buoyed stocks earlier in the month, markets are still adjusting to a shift in policy outlook after the central bank delivered a widely expected quarter-point rate cut but signaled that another move in December was not a "foregone conclusion".
The Fed's cautious language prompted traders to scale back bets on a third cut this year, with futures now pricing a 67.9% chance of a similar-sized move in December, down from nearly 90% earlier in the week.
In other premarket moves, Warner Bros Discovery (WBD.O), shares rose 3.6% following a Reuters report that Netflix (NFLX.O), was actively exploring a bid for the company's studio and streaming business.
Netflix added 2.5% as it unveiled plans for a 10-for-1 stock split.
Western Digital (WDC.O), jumped 10% after forecasting quarterly earnings above Wall Street estimates.
Strategy (MSTR.O), rose 5.9% after posting a profit in the third quarter, compared with a loss a year earlier.
Reporting by Pranav Kashyap and Nikhil Sharma in Bengaluru; Editing by Mrigank Dhaniwala and Krishna Chandra Eluri
