Tech Stocks Rise on Federal Reserve Signals and Robust Meta Forecast

Tech stocks, especially Meta, saw gains following signals from the U.S. Federal Reserve about potential rate cuts in September and a promising sales forecast. The investor enthusiasm was tempered by some megacap and chip stocks' performance. Futures also showed mixed results amid the positive news.

Futures for the S&P 500 and Nasdaq saw modest rises on Thursday, driven by the U.S. Federal Reserve's indications of a potential interest-rate cut in September and a positive sales forecast from Meta. However, gains were limited by pullbacks in some megacap and chip stocks.

Meta Platforms surged by 7% in premarket trading after it surpassed second-quarter revenue expectations and offered an optimistic third-quarter sales forecast. Kathleen Brooks, research director for XTB, noted, 'Meta has bought the AI theme some time... investors are willing to overlook increased capital expenditure, as long as revenue growth remains strong.'

This positive indicator from Meta, a member of the 'Magnificent Seven' tech companies, helped ease investor concerns about AI spending, which were heightened by disappointing earnings from Alphabet and Microsoft last month. Wall Street has been closely watching these tech giants, seeking confirmation that their AI-driven gains can continue in the face of potential policy easing by the Fed.

(With inputs from agencies.)