By Ankika Biswas and Lisa Pauline Mattackal

(Reuters) - Wall Street futures rose on Friday, with Nasdaq futures up nearly 1% as megacap tech and chip stocks rebounded after the week's walloping, while investors awaited U.S. inflation figures to justify bets on early rate cuts by the Federal Reserve.

All the so-called Magnificent Seven stocks - Apple ( AAPL ), Nvidia ( NVDA ), Alphabet, Microsoft ( MSFT ), Meta Platforms ( META ), Amazon.com ( AMZN ) and Tesla - were up between 0.7% and 2.2% in premarket trading.

Chip stocks also rebounded, with Intel, Broadcom, Qualcomm, Micron Technology and Arm Holdings up between 1% and 2%.

At 7:09 a.m. ET, Dow e-minis were up 248 points, or 0.62%, S&P 500 e-minis were up 41 points, or 0.75%, and Nasdaq 100 e-minis were up 186 points, or 0.98%.

Investors have dumped tech stocks over the past few weeks, with disappointing earnings from Alphabet and Tesla sparking a sharp sell-off in megacap and artificial-intelligence-linked stocks on Wednesday. The S&P 500 and the Nasdaq were on track for a second straight weekly decline, if losses hold.

Concerns about Wall Street's growing dependence on a set of high-momentum stocks, whose valuations now appear inflated, have made underperforming sectors like mid- and small-cap stocks seem more alluring as the prospect of early rate cuts rises.

Futures tracking the small-cap Russell 2000 jumped 1.4% on Friday, with the index set for its third straight week of gains if trends hold.

"A brutal rotation from U.S. information technology leaders to U.S. small caps has encouraged the narrative of a healthy rotation and a Goldilocks scenario for equities," Yves Bonzon, chief investment officer at Julius Bar said in a note.

However, Bonzon said he remained wary, noting that "the odds of a correction are higher than those of a sustainable rotation".

The much-awaited Personal Consumption Expenditures Price Index data - the Fed's preferred inflation gauge - will be watched to see if inflation cools further. Recent signs of easing inflation and a weakening labor market have boosted bets on an early start to the Fed's interest-rate cuts.

Traders have priced in around two rate cuts by December, according to LSEG data, while bets of a 25-basis-point cut by the Fed's September meeting stood at 88%, according to CME's FedWatch.

The Commerce Department's report, due at 8:30 a.m. ET, is expected to show the PCE print rose 0.1% on a monthly basis in June after last month's flat reading. Excluding volatile items such as food and energy, the core figure is expected to increase 0.1%, after a similar rise in May.

Earlier this week, data showing faster-than-expected second-quarter economic growth and subsiding inflation pressures kept hopes of a September rate cut intact, boosting the blue-chip Dow and the small-cap Russell 2000.

On the earnings front, Deckers Outdoor jumped 11% after raising its annual profit forecast following a first-quarter results beat, while Oilfield services firm Baker Hughes climbed 2% after beating estimates for second-quarter profit.

Medical device maker Dexcom slumped 35.3% after cutting its annual revenue forecast, while drugmaker Bristol Myers Squibb rose 4.7% after better-than-expected second-quarter results.

Investors also kept an eye out for developments in the U.S. presidential race, with new opinion polls showing Vice President Kamala Harris narrowing the gap with Republican rival Donald Trump.