U. S.
stock index futures rose on Thursday, recovering from a sharp selloff triggered by uncertainty over Federal Reserve policy.
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Microsoft's stronger-than-expected quarterly forecast helped reassure investors concerned about rising AI costs.
Microsoft shares surged 9% in premarket trading after the company forecast current-quarter sales and cloud growth above expectations.
Its capital expenditure outlook came in below Wall Street estimates, and it plans to continue generating cash in fiscal 2027.
Investors have been unsettled by increasing AI-related expenses among major tech firms despite strong earnings.
Last week, negative cash-flow results from Alphabet and Tesla led to selling pressure on AI-linked stocks and chip manufacturers, contributing to a 10% drop in the Nasdaq from its early June peak by Wednesday.
Meta Platforms' stock fell 8.5% after reporting a 91% decline in second-quarter free cash flow, highlighting the financial impact of its costly AI developments.
Apple and Amazon are scheduled to release earnings after markets close on Thursday.
Wednesday's market decline was the largest since June 10 for the S&P 500, following the Fed's decision to keep interest rates steady between 3.50% and 3.75%.
Mixed signals from new Fed Chair Kevin Warsh left investors uncertain about future rate movements.
"Despite the divided vote, there was nothing really in Warsh's remarks that made it clear that a September hike was in the offing," said Matthew Ryan, head of market strategy at Ebury.
Bond markets reacted nervously, with the 30-year Treasury yield reaching its highest level in 19 years as concerns about the Fed's monetary policy outlook and inflation protection grew.
