Investors Watching Inflation Data and Oil Earnings

U.S. futures were up Friday morning after Google parent Alphabet and Microsoft shares spiked in after-hours trading.

The tech giants reported better-than-expected quarterly earnings after the bell, with Alphabet announcing its first cash dividend. Shares were up more than 11 percent pre-market. Microsoft was up nearly 4 percent.

This comes a day after the major U.S. stock indexes fell, weighed down by a one-two punch of economic data that showed growth slowing and inflation persisting.

Also dragging on the markets Thursday was Facebook and Instagram parent Meta Platforms, which saw shares drop more than 10 percent as investors reeled from the company’s promise to spend more on artificial intelligence technology.

Investors’ enthusiasm for AI is markedly high, driven by AI’s transformative potential across various sectors, including healthcare, finance, and technology. This has vividly manifested in the stock market, with companies that are leaders or innovators in AI technologies having an outsized impact on gains and losses.

For instance, companies like Alphabet and Amazon have been focal points for investors due to their significant investments and advancements in AI. Alphabet has not only pumped billions into AI startups but is also expanding its AI capabilities into new areas like autonomous vehicles and AI-driven chatbots​. Similarly, Amazon is leveraging AI in diverse facets of its operations, from e-commerce algorithms to cloud computing services provided by Amazon Web Services, which includes substantial AI integration​.

Overall, the prevailing investor sentiment around AI is one of optimism and strategic positioning, aiming to capitalize on the growth trajectory that AI technologies are anticipated to follow in the coming years. The stakes are high for these AI leaders to meet expectations and justify their share price.

On Friday, investors will be watching for the release of core inflation data released in the morning, which will impact the Federal Reserve’s decision on whether to cut interest rates as it seeks to hit its 2 percent inflation target.

Oil giants Exxon Mobil and Chevron are scheduled to post quarterly earnings Friday morning.

Next week is set to be another earnings-packed extravaganza for investors, with less focus on Big Tech and more on consumer goods. Two of the so-called Magnificent Seven, Amazon and Apple, report their quarterly results.

Earnings highlights to watch next week:

• Monday: Domino’s Pizza, Paramount, SoFi Technologies
• Tuesday: Amazon, Eli Lilly, Coca-Cola, McDonald’s, Starbucks, Stellantis, Mondelez, PayPal, 3M
• Wednesday: Mastercard, Pfizer, CVS, Marriott, DoorDash, The Kraft Heinz Company, Pizza Hut and KFC parent Yum! Brands, ebay
• Thursday: Apple, pharmaceutical company Novo Nordisk, Shell, Moderna
• Friday: Berkshire Hathaway, AMC