Wall Street Poised for Gains on Tech Surge and Positive PCE Data

Wall Street's major indices are anticipated to open higher today, buoyed by robust quarterly performances from tech giants Alphabet and Microsoft. This surge in growth stocks comes alongside encouraging signs of progress in inflation management, reigniting hopes for a potential interest rate cut later this year.

Alphabet's premarket trading soared by 11.7% following the announcement of its inaugural dividend and a $70 billion stock buyback. The company exceeded expectations with its first-quarter results, propelling its market value potentially beyond $2 trillion if premarket gains persist.

Adding to the positive momentum, Microsoft saw a 3.9% increase after surpassing Wall Street's projections for third-quarter revenue and profit. The growth was driven by increased adoption of artificial intelligence (AI) within its cloud services.

Amazon.com and Nvidia also experienced gains, rising by 3.0% and 2.0%, respectively, in response to the strong earnings reports. Similarly, Meta Platforms recovered slightly, gaining 0.3% after a significant 11% drop in the previous session.

Furthermore, the release of the Personal Consumption Expenditures (PCE) price index for March provided additional optimism. The index rose by 0.3%, meeting economists' expectations. Year-on-year, PCE inflation increased by 2.7%, slightly surpassing forecasts.

However, the data did not significantly alter the Federal Reserve's outlook on inflation. While it suggested a positive trajectory, concerns lingered about meeting the target of 2% on a sustainable basis.

Following the data release, money markets adjusted their expectations, indicating a higher likelihood of a rate cut in September. This adjustment led to a decrease in the yield on the benchmark 10-year Treasury note.

Despite Exxon Mobil's 1.6% decline due to a 28% drop in first-quarter profit, social media firm Snap surged by 24.9% after exceeding revenue and user growth estimates for the quarter. Similarly, Pinterest saw a 4.2% increase in its shares.

However, Intel experienced an 8.5% drop in premarket trading after forecasting second-quarter revenue and profit below expectations. The company faces challenges in meeting demand for traditional data center and PC chips, lagging behind in the AI components market.

Overall, the upbeat earnings reports across various sectors this week have boosted Wall Street's main stock indexes. The S&P 500 and Nasdaq are set to end their losing streaks, offering hope for a positive finish to the week.

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