U.S. stock index futures edge higher as Fed worries about tech stocks

Investing.com – U.S. stock index futures edged higher in late trading on Sunday, tracking strong gains on Wall Street as positive earnings from Alphabet and Microsoft sparked gains in technology stocks.

But sectors outside of technology are less enthusiastic, especially as evidence mounts that inflation is not easing as initially expected and the Fed is likely to keep interest rates higher for longer. .

The central bank is scheduled to meet later this week.

It was up 0.1% at 5,1137.75 points and was up 0.1% at 17,862.25 points as of 19:09 ET (23:09 GMT). It rose 0.1% to 38,489.0 points.

Alphabet, Microsoft drive tech surge

Tech giants Alphabet Inc (NASDAQ: ) and Microsoft Corp (NASDAQ: ) posted blowout first-quarter results, sparking gains in tech stocks on hopes that demand for artificial intelligence will help keep profits and valuations optimistic in the coming months.

The two stocks rose on Friday, with Alphabet's shares soaring more than 10% after announcing its first dividend. The stock hit an all-time high, and analysts say the company is among its peers best positioned to benefit from the artificial intelligence boom.

Technology stocks outperformed other sectors on Friday, closing up 2% at 15,927.90. The stock also rose 1% to 5,099.96. But the index's performance was much lower, rising 0.4% to 38,239.66 points.

Earnings season continues this week, with more Wall Street giants set to report in the coming days. After a relatively quiet day on Monday, Amazon.com Inc (NASDAQ: ), The Coca-Cola Company (NYSE: ), Advanced Micro Devices Inc (NASDAQ: ) and Eli Lilly and Company (NYSE: ) are set to report earnings on Tuesday.

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Fed meeting takes center stage as rate cut expectations fade

Most stock sectors outside of technology were trading weaker on Friday, especially after data – the Fed's preferred inflation gauge – showed March numbers were warmer than expected.

The data raised concerns that the Federal Reserve lacks confidence in starting to cut interest rates and that the central bank may keep interest rates higher for longer.

That puts more central bank clues coming later this week into focus. The Fed is widely expected to keep interest rates unchanged in May.

Bets are growing that the Fed will start cutting interest rates by September or the fourth quarter due to sticky inflation and some elasticity in U.S. consumer spending.

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