Investing.com -- U.S. stock futures point up heading into the final trading session of the week, with earnings from Google-owner Alphabet (NASDAQ:GOOGL) and software titan Microsoft (NASDAQ:MSFT) in focus. Investors are also gearing up for the release of a fresh indicator of U.S. inflation later in the day, which could play into the Federal Reserve's monetary policy deliberations.
1. Futures higher
Stock futures in New York inched higher on Friday, as traders digested earnings from major technology companies and looked ahead to the release of key U.S. inflation data.
By 03:30 ET (07:30 GMT), the Dow futures contract had added 48 points or 0.1%, S&P 500 futures had risen by 39 points or 0.8%, and Nasdaq 100 futures had increased by 188 points or 1.1%.
The main indices on Wall Street finished lower in the prior session, weighed down by an unexpectedly weak reading of U.S. economic growth in the first quarter. The numbers, coupled with signs of persistently sticky inflation, dented hopes that the Federal Reserve may soon begin to start to cut interest rates down later this year.
Also dampening sentiment were results from Facebook-owner Meta Platforms (NASDAQ:META), who flagged that future revenues may be hit by accelerated spending on its artificial intelligence ambitions. Shares in the company dipped by more than 10% on Thursday, dragging down equities in the communications sector in particular. Other segments, including healthcare, consumer staples, and real estate, also slipped.
2. Alphabet and Microsoft shares jump
Shares in Alphabet, meanwhile, soared in extended hours trading after the Google parent reported better-than-anticipated first-quarter revenue and unveiled a first-ever dividend of 20 cents a share.
Revenue at the California-based search giant swelled to $80.5 billion during the three-month period, up from $69.8 billion a year ago and above Wall Street projections of $78.7 billion, thanks in part to surging demand for AI services on its Azure cloud computing platform. Earnings per share of $1.89 beat consensus estimates of $1.51.
Operating margin also improved to 32% from 25%, ahead of expectations, a development cheered by analysts as a sign that Alphabet is moving to corral costs despite the firm's plan to spend more on developing its AI capabilities.
The nascent technology also bolstered Alphabet peer Microsoft's cloud division. The Seattle-based group, which grabbed an early stake in the AI gold rush through a $13 billion investment in ChatGPT-maker OpenAI, subsequently posted estimate-topping income and revenue as well, sending shares into the green after the closing bell.
Microsoft's Chief Financial Officer Amy Hood also said that capital expenditures would increase "materially" to help meet demand for its generative AI offerings.
3. Snap's earnings beat estimates, sending shares sharply higher
Snap shares spiked in after-hours trading, buoyed by quarterly revenue and user data figures that were above expectations.
The Los Angeles-based social media group unveiled three-month revenue of $1.2 billion for the opening three months of the year, up by 21% versus the corresponding period in 2023, due largely to improvements in its advertising services. Analysts had called for revenue of $1.12 billion.
Daily active users at its Snapchat app also increased to 422 million, above projections of 419.6 million.
Snap, which was under close scrutiny following disappointing results from bellwether Meta earlier in the week, also announced current-quarter guidance for revenue between $1.23 billion to $1.26 billion. Analysts had seen the forecast at $1.22 billion.
4. PCE data ahead
Economists are calling for a mixed reading of the March personal consumption expenditures (PCE) price index, a gauge of U.S. inflation that could factor into how the Federal Reserve approaches potential interest rate reductions this year.
The overall measure is expected to remain widely unchanged at 0.3% on a month-on-month basis, while the annualized figure is seen accelerating slightly to 2.6% from 2.5% in February.
The so-called "core" PCE data, which strips out volatile items like food and fuel, is also anticipated to broadly equal February's monthly pace of 0.3%. Year-on-year, it is estimated at 2.6%, slowing from the previous mark of 2.8%.
Cooling inflation has been a central tenet of the Fed's decision to ratchet up borrowing costs to more than two-decade highs. Earlier this year, policymakers were widely tipped to start lowering rates imminently, but stubborn price pressures and lingering strength in the U.S. economy have led many investors to push back these bets.
5. Oil on track for positive week
Oil prices rose slightly in European trade on Friday and were set for a positive end to the week as traders eyed possibly tighter supplies and persistent geopolitical unrest in the Middle East.
But gains were tepid with markets on edge ahead of the U.S. inflation data later in the day, which may offer more cues on the path of interest rates.
Brent oil futures inched up 0.7% to $89.67 a barrel, while West Texas Intermediate crude futures advanced 0.7% to $84.15 per barrel by 03:28 ET.