Tech Titans Lead Markets to Recuperation: A Friday Rally

The S&P 500 and Nasdaq rebounded sharply Friday, buoyed by optimistic forecasts from tech giants Apple and Amazon. Amazon shares soared 12.9% due to strong cloud revenue. Apple's robust iPhone sales prediction further enhanced market sentiment. However, concerns persist over Big Tech's significant AI investments and their impact on future earnings.

The S&P 500 and Nasdaq looked set for a positive start Friday following encouraging projections from Apple and Amazon, easing concerns after the indices faced their steepest drop in over three weeks. Amazon's shares leapt 12.9% in premarket trading, driven by a firm forecast for quarterly sales supported by rapid growth in cloud revenue.

Apple also climbed 2.6% after setting expectations for iPhone sales in the holiday period above Wall Street's projections. Investors now have a clearer view of Big Tech's spending tactics, particularly as seven major companies, excluding Nvidia, have shared their quarterly results. The focus is on Microsoft and Meta's AI investments, with analysts like Ipek Ozkardeskaya from Swissquote Bank highlighting the gap between high spending and realized earnings.

Despite a tempered outlook from the Federal Reserve and a fall in rate cut expectations, the tech-driven Nasdaq is poised for a notable monthly gain, marking its longest winning streak since 2017. Meanwhile, other premarket activity included a rise in Warner Bros Discovery shares following buyout interest from Netflix and strategic stock splits and earnings forecasts boosting companies like Getty Images and Western Digital.

(With inputs from agencies.)