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US stock futures steady as Microsoft offsets Fed concerns 
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US stock futures steady as Microsoft offsets Fed concerns 
Jul 30, 2026 4:12 AM

July 30 (Reuters) - U.S. stock index futures steadied on Thursday after a sharp selloff driven by uncertainty around the Federal Reserve's policy outlook, while Microsoft's forecast-beating results soothed investor concerns about massive AI spending by companies.

Microsoft rose nearly 9% in premarket trading after the company forecast current-quarter sales and cloud growth that beat expectations, gave a capital expenditure outlook below Wall Street estimates and said it expects to keep generating cash through its just-started fiscal 2027.

Investors have been spooked by rising AI costs at big technology firms even as they report strong earnings. Negative cash-flow reports from Alphabet and Tesla last week sparked a bout of selling in AI-linked stocks, with chip stocks also coming under pressure as investors question high valuations. The tech-heavy Nasdaq dropped 10% from its early June peak on Wednesday.

In a sign that AI concerns were far from over, Meta Platforms dropped 9.2% after the social media giant reported a 91% drop in second-quarter free cash flow, underscoring the financial strain of its costly AI buildout.

Apple and Amazon are scheduled to report earnings after markets close on Thursday.

U.S. stocks fell sharply on Wednesday, with the benchmark S&P 500 posting its biggest percentage drop since June 10, after the Fed left interest rates unchanged in the 3.50%-3.75% range, but mixed messages from new Fed Chair Kevin Warsh left traders confused about the path of borrowing costs.

U.S. 30-year Treasury yields jumped to 19-year highs on Thursday, while the yield on 2-year notes, which reflects near-term interest rate expectations, was largely unchanged at 4.26%. [US/] 

Traders currently see a 65% chance that the U.S. central bank will raise interest rates by 25 basis points at its September meeting, as per CME Group's FedWatch tool. 

Key economic data including the preliminary reading of second-quarter GDP, personal consumption expenditures for June and weekly initial jobless claims are due at 8:30 a.m. ET.

The GDP report is expected to show the U.S. economy grew at a 2.1% annualized rate last quarter, matching the January-March quarter's pace, as the economy largely weathered the Middle East conflict.

At 6:18 a.m. ET, S&P 500 E-minis were up 30.5 points, or 0.41%, Nasdaq 100 E-minis were up 236.25 points, or 0.86%, and Dow E-minis were up 119 points, or 0.23%.

Among other stocks, Qualcomm fell 5.3%, as the chipmaker forecast fourth-quarter profit below estimates and said revenue from Apple products would decline faster than expected.

U.S.-listed shares of Arm dropped 5% after the British chip designer said it expects smartphone royalties to fall in "this next quarter".

Nearly half of S&P 500 companies have reported second-quarter results so far. Of those, 85.2% have topped analysts' profit estimates, as per LSEG IBES data, compared with an average beat rate of 68%.

Starbucks climbed 7.3% after the world's largest coffee chain raised its annual sales and profit forecasts, while Chipotle Mexican Grill added 5% as the burrito chain raised its annual sales forecast.

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