US Futures Gain, Powered by Alphabet and Microsoft – Europe Market Wrap

US equity futures rose as Microsoft and Alphabet reported record results, indicating that the artificial intelligence boom that has fueled increases in technology companies is still on track.

Alphabet, the parent company of Google, rose as much as 12% in premarket trade, on track to add more than $230 billion to its market capitalization and surpass $2 trillion in valuation. Microsoft gained 4%. The companies’ latest quarterly results outperformed Wall Street expectations, aided in part by demand for AI services.

The robust earnings were a relief to investors concerned about the tech sector’s stratospheric valuations, and came after the market was shaken by data showing a dramatic US economic slowdown and relentless inflation, which pushed Treasury yields higher. The question is whether the performance of a few tech megacaps can support a larger market surge.

While profits continue to take centre stage, Friday’s focus will be on US statistics, particularly the Federal Reserve’s preferred measure of inflation. Treasury yields fell after yesterday’s bond market losses, as economic data pushed back expectations for policy easing. The dollar index remained stable.