Nasdaq Futures Lead as Amazon Offsets Apple Dip

Nasdaq Futures Lead as Amazon Offsets Apple Dip

Nasdaq futures led gains Friday, with Amazon shares rising 12 percent after the company reported cloud revenue growth that aligned with results from other major technology firms. The performance followed earlier reports from Microsoft and Alphabet and reduced some investor concerns about returns on artificial intelligence spending that had contributed to volatility earlier in the month.

Apple shares fell 7.3 percent in premarket trading after the company stated that supply constraints would limit growth. Investors assessed the potential impact of an anticipated iPhone price increase alongside the near-term supply issues.

The week had been described by some analysts as a key period for the technology sector, which experienced profit-taking in July after a strong close to the second quarter. Market participants awaited evidence that capital expenditures by leading artificial intelligence companies were generating returns despite reductions in free cash flow.

Amazon posted its largest quarterly revenue increase in more than four years. Microsoft shares declined 0.8 percent after a record one-day gain in the prior session. Alphabet rose 2.3 percent, Meta advanced 2 percent, and Tesla gained 1.6 percent. Nvidia increased 1.5 percent and Micron rose 3.5 percent.

At 7:04 a.m. Eastern time, S&P 500 futures were up 35.50 points, or 0.48 percent, at 7,508.00. Dow futures gained 349 points, or 0.67 percent, to 52,729.00. Nasdaq futures rose 341.25 points, or 1.21 percent, to 28,579.00. Russell 2000 futures added 16.10 points, or 0.54 percent, to 2,970.40.

The three major Wall Street indexes were positioned for weekly gains after a late-week rebound but remained on track for monthly declines following the July selloff in artificial intelligence-related stocks. The Philadelphia Semiconductor Index was down more than 20 percent for the month, which would represent its largest monthly decline since late 2008.

The S&P 500 equal-weighted index was on pace for its fourth consecutive month of gains. John Plassard, head of investment strategy at Cité Gestion, stated that companies must now demonstrate drivers of future growth beyond beating estimates. He noted that Amazon’s results supported continued momentum for hyperscale cloud providers in artificial intelligence, while Apple faced challenges in advancing its artificial intelligence strategy and restoring growth in China.

Laurent Clavel, global head of multi-asset at AXA Investment Managers, observed that the recent decline in momentum had reduced positioning and that investors were gradually re-entering the market and the artificial intelligence theme.

The Federal Reserve held interest rates steady during the week. Comments from Chairman Kevin Warsh and an inflation report released Thursday led investors to assign a 36.8 percent probability to unchanged rates in September, up from about 20 percent the prior week. The University of Michigan’s July consumer sentiment survey was scheduled for release at 10 a.m. Eastern time.

GoDaddy shares dropped 12.4 percent after the company reduced its annual revenue forecast.