Futures up as rate-cut hopes prevail; Meta climbs
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Meta rises on upbeat revenue forecast
Arm Holdings down after tepid Q2 revenue forecast
Western Digital slumps after Q1 revenue forecast below estimates
Futures up: Dow 0.08%, S&P 500 0.41%, Nasdaq 0.49%
Updated at 7:02 a.m. ET/1102 GMT
By Ankika Biswas and Shubham Batra
Aug 1 (Reuters) -Futures tied to Wall Street's main indexes kicked off August on a high note, boosted by the Federal Reserve's signals of a September rate cut and a rosy sales forecast from Meta, while apullback in some megacap and chip stocks kept gains in check.
Meta Platforms META.O soared 6.5% in premarket trading after a second-quarter revenue beat and an upbeat third-quarter sales forecast pointed to the possibility that its artificial intelligence costs would be covered.
"Meta has bought the AI theme some time... investors are willing to overlook increased capital expenditure, as long as revenue growth remains strong," said Kathleen Brooks, research director for XTB.
The Facebook-owner's quarterly results were the first among the "Magnificent Seven" group of companies to enthuse investors, allaying concerns around AI spending following dismal earnings from Alphabet GOOGL.O and Microsoft MSFT.O last month.
Markets havebeen on tenterhooks, looking for signs that the tech behemoths can hold on to their bumper gains after steering U.S. equities torecord highs this year on AI euphoria and hopes of early rate cuts.
Most megacap stocks rose, withApple AAPL.O and Amazon.com AMZN.O gaining 0.9% and 1.3%, respectively, ahead of their results, due after markets close. Tesla TSLA.O was down 0.3%.
AI-trade favorite Nvidia NVDA.O rose 2.2%, a day after adding about $330 billion to its market value -a record one-day gain for any Wall Street company.
The S&P 500 <.SPX>and the Nasdaq .IXIC had their best day sinceFeb. 22 on Wednesday, after Fed Chair Jerome Powell offered the stock market a likely pivot to policy easing in September, with inflation on track to achieve the 2% target withoutundue damage to the labor market.
However, with theprospect of rate cuts gaining traction, investors are now trying to gauge if the central bank will be able to ease policy at a pace consistent with achieving the much awaited "soft landing" for the economy.
Economic data including weekly jobless claims and manufacturing PMIs, due through the day, is at the top of investors' watch list.
At 7:02 a.m. ET, Dow e-minis 1YMcv1 were up 32 points, or 0.08%, S&P 500 e-minis EScv1 were up 23 points, or 0.41%, and Nasdaq 100 e-minis NQcv1 were up 95.25 points, or 0.49%.
Moderna MRNA.O tumbled 11.9% after itcut its 2024 sales forecast for COVID-19 and respiratory syncytial virus vaccines by up to 25%, or $1 billion, as it expects very low sales to the EU.
Eli Lilly LLY.N was up 2.2% after trial results showed weight loss drug Zepbound reduces the risk of hospitalization, death and other outcomes for obese adults with a common type of heart failure.
Arm Holdings ARM.O slumped 8.4% after aconservative revenue forecast, while Qualcomm QCOM.O lost 1.3% on flagging a revenue hit after the U.S. revoked one of its export licenses for sanctioned Chinese telecom firm Huawei.
Western Digital Corp WDC.O dropped 4.3% after it forecastfirst-quarter revenue below estimates.
Of the 283 S&P 500 companies that have reported second-quarter earnings till date, 78.4% beat expectations, LSEG data showed.
Reporting by Ankika Biswas and Shubham Batra in Bengaluru; Editing by Pooja Desai
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