Futures up as megacaps ride Amazon, Intel wave; inflation data in focus

[October 27, 2023]  By Ankika Biswas and Shashwat Chauhan

(Reuters) -Futures for Wall Street's main stock indexes rose on Friday as robust forecasts from Amazon.com and Intel lifted beaten-down megacaps, while investors awaited key inflation data during the day.

Amazon.com gained 6.2% in premarket trading after saying growth in its cloud business was stabilizing following new deals. However, it warned that customers remained wary about spending heading into the holiday quarter.

"Amazon results were always going to be about the cloud ... when AWS does well, it manages the incredible feat of propping up the majority of Amazon's bottom line these days," Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said in a note.

Intel advanced 7.0% after forecasting fourth-quarter revenue and margins above estimates. Other chip stocks including Advanced Micro Devices and Nvidia added 2.0% and 1.5%, respectively.

Megacaps Microsoft, Meta Platforms, Tesla and Alphabet were up between 0.5% and 2.1%.
 

Oil major Chevron fell 1.0% after reporting a fall in third-quarter profit. Exxon Mobil posted a near 54% drop from record earnings a year ago, but profit rose from the prior quarter. Its shares were trading flat.

Toothpaste-maker Colgate-Palmolive rose 0.8% after beating third-quarter sales estimates.

Investor focus will be on personal consumption expenditure for September, the Federal Reserve's preferred inflation metric, at 8:30 a.m. ET for more clarity on the monetary policy outlook.

The U.S. Commerce Department's report is expected to show a 0.3% monthly rise in the headline and core figures, excluding volatile energy and food items, according to a Reuters poll. Annually, they are seen rising 3.4% and 3.7%, respectively.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 26, 2023. REUTERS/Brendan McDermid

Traders have fully priced in the Fed will hold interest rates in its meet concluding Nov. 1 and an 80% chance of the same in December, as per CME's FedWatch tool.

Meanwhile, bets of a 25-basis-point rate cut stood at over 32% for May and June.

All the three benchmark indexes are set for weekly and monthly losses with investors assessing earnings and a slew of data for clues on the economy's strength.

At 7:00 a.m. ET, Dow e-minis were up 18 points, or 0.05%, S&P 500 e-minis were up 16.25 points, or 0.39%, and Nasdaq 100 e-minis were up 117.25 points, or 0.83%.

Ford Motor lost 3.7% after withdrawing its full-year results forecast due to "uncertainty" over the pending ratification of its deal with the United Auto Workers union, and warning of continued pressure on electric vehicles.

Enphase Energy dipped 20.7% after the solar inverter maker forecast fourth-quarter revenue below estimates.

The tensions in the Middle East were also on investors' radar.

Two U.S. fighter jets struck weapons and ammunition facilities in Syria in retaliation for attacks on U.S. forces by Iranian-backed militia as concerns grew that the Israel-Hamas conflict may spread in the Middle East.

(Reporting by Ankika Biswas and Shashwat Chauhan in Bengaluru; Editing by Arun Koyyur and Vinay Dwivedi)

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