U.S. Stocks Rally on Tech Earnings and Trade Deals

Market Performance and Key Earnings Results

U.S. stock futures climbed on Thursday as robust earnings from Meta and Microsoft bolstered investor confidence in the technology sector. Meta Platforms saw its shares surge 11.5% in premarket trading after forecasting stronger-than-expected third-quarter revenue, driven by artificial intelligence advancements in its advertising business. Microsoft also posted impressive results, with an 8.3% premarket gain, backed by record Azure cloud sales and a $30 billion capital expenditure outlook for AI infrastructure.

The tech-heavy Nasdaq 100 futures rose 1.3%, while S&P 500 futures advanced 1%, and Dow Jones futures gained 0.3%. These gains come ahead of anticipated earnings reports from Apple and Amazon, which are expected to further shape market sentiment. In addition, Nvidia and Amazon saw respective premarket gains of 1.6% and 3.2%, reflecting continued optimism in the tech sector's performance.

Economic Data and Federal Reserve Updates

The Federal Reserve announced its decision to hold interest rates steady for the fifth consecutive meeting, a move widely anticipated by markets. However, the decision was not unanimous, with two members of the Federal Open Market Committee dissenting, signaling internal debates about the path forward.

Chair Jerome Powell emphasized that no decisions have been made regarding a potential rate cut in September, even as traders priced in a 56.8% chance of no change in rates, according to CME Group's FedWatch Tool. Investors are also closely watching the release of the Personal Consumption Expenditures (PCE) index, the Fed's preferred measure of inflation, which is expected to provide further clarity on the central bank's monetary policy trajectory.

Trade Deals and Global Market Insights

A new trade agreement between the U.S. and South Korea worth $450 billion has provided a positive boost to market sentiment. The deal includes a 15% tariff rate on U.S. imports to South Korea, with Seoul pledging significant investments and energy product purchases. This is part of a broader push by the U.S. to finalize trade deals ahead of impending tariff deadlines.

Global equity markets showed mixed results. In Asia, Japan’s Nikkei 225 and India’s S&P BSE Sensex posted gains, while China’s CSI 300 and Hong Kong’s Hang Seng declined. European markets opened higher, supported by easing trade tensions and strong earnings from U.S. tech companies. Meanwhile, crude oil futures edged up 0.07% to $70.05 per barrel, and gold spot prices rose 1.12% to $3,312.99 per ounce, reflecting cautious optimism in commodity markets.