Tech Giants Propel Market Rally Amid AI Investments

The S&P 500 and Nasdaq rebounded after Apple and Amazon offered positive forecasts, calming investors post a significant market drop. Amazon's cloud revenue boosts forecasts while Apple's iPhone sales exceeded expectations, driving futures upward. Despite market jitters over Big Tech's AI expenditure, indexes are set for weekly gains.

The U.S. stock market saw a resurgence on Friday, with S&P 500 and Nasdaq futures rising following optimistic forecasts from tech behemoths Apple and Amazon. Their encouraging outlooks alleviated investor tension after a significant drop in the indexes earlier in the week.

Amazon's shares soared by 11.5% in premarket trading as it predicted robust quarterly sales, driven by its cloud revenue achieving its fastest growth in three years. Meanwhile, Apple saw a 2.3% increase in its share price, with forecasts for its holiday quarter iPhone sales surpassing Wall Street's estimates.

As most of the "Magnificent Seven" companies reported, speculation around Big Tech's substantial AI-related investments emerged, affecting market sentiment. Nevertheless, the Nasdaq appears en route to its seventh straight monthly rise, buoyed by easing Federal Reserve rate cut expectations. Market dynamics are adapting to potential changes in Fed policies amid economic data delays from a government shutdown.

(With inputs from agencies.)