U.S. equity futures pointed modestly higher early Thursday, signaling a positive start to trading after the major indices finished the prior session close to flat.
Early strength looked set to be driven by a strong earnings reaction from Meta Platforms (NASDAQ:META), with the Facebook owner jumping more than 9% in premarket dealings. The rally followed better-than-expected fourth-quarter results and first-quarter revenue guidance that topped Wall Street forecasts.
Other large-cap technology names also added support. Shares of IBM Corp. (NYSE:IBM) advanced sharply before the bell after the company delivered fourth-quarter results that beat expectations on both revenue and profit. Tesla (NASDAQ:TSLA) also appeared poised to open higher after reporting quarterly numbers that exceeded analyst estimates.
Offsetting some of the optimism was weakness in Microsoft (NASDAQ:MSFT), whose shares slid more than 6% in premarket trading. The decline came after the company flagged slower growth in its cloud business during the fiscal second quarter and issued softer-than-expected guidance for third-quarter operating margins.
During Wednesday’s session, the main U.S. benchmarks struggled to hold early gains and spent much of the day drifting around unchanged levels, ultimately closing narrowly mixed. The S&P 500 edged down by less than a point to finish at 6,978.03, while the Dow Jones Industrial Average added 12 points to 49,015.60. The Nasdaq Composite outperformed slightly, rising 0.2% to 23,857.45.
Markets remained unsettled after the Federal Reserve delivered its widely anticipated decision to keep interest rates unchanged. Policymakers maintained the federal funds target range at 3.50% to 3.75% following three straight quarter-point cuts.
The decision was not unanimous, however, with Governors Stephen Miran and Christopher Waller favoring another 25-basis-point reduction. The Fed cited heightened uncertainty around the economic outlook and reiterated its focus on managing risks to both employment and inflation.
“While not a unanimous vote, there does seem to be a clear and consistent majority in favor of a pause in this rate-cutting cycle, a pause that likely continues unless or until the job market weakens further,” said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.
He added, “With inflation remaining elevated, the FOMC majority does not seem in any rush to make further rate moves.”
According to expectations tracked by CME Group, investors now anticipate that rates will remain on hold at least until after Fed Chair Jerome Powell steps down in May.
With the policy decision largely priced in, investor focus shifted to earnings from major technology companies released after the close. Despite uneven trading in the broader market, gold-related stocks surged as bullion prices continued to climb, pushing the NYSE Arca Gold Bugs Index to a fresh record closing high.
Strength was also evident in computer hardware shares, with the NYSE Arca Computer Hardware Index rising 2.6% to a new closing peak, helped by a sharp jump in Seagate Technology after the company reported better-than-expected fiscal second-quarter results.
Semiconductor and networking stocks also advanced, while oil services, pharmaceutical and biotechnology shares were among the session’s notable decliners.
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