By Pranav Kashyap and Twesha Dikshit
Feb 4 (Reuters) – S&P 500 and Dow futures edged up on Wednesday, drawing support from upbeat results at Eli Lilly and Super Micro Computer, even as investors were still nursing losses from the previous session’s bruising selloff in software and cloud stocks.
The software and services index, home to several leading cloud and software companies, fell for a fifth straight session on Tuesday, down more than 12% over the period, its steepest stretch of losses since March 2020.
The losses reflect persistent concerns about how rapid advances in artificial intelligence could upend long-standing software business models.
CrowdStrike, Intuit and Adobe were marginally lower in premarket trading.
Meanwhile, Advanced Micro Devices slid 9.4%, after the company forecast a slight dip in quarterly revenue.
“AMD reported into an ugly tape, with tech being sold and questions about AI spending driving a sentiment shift across the space,” said Jake Behan, head of capital markets at Direxion.
“The move was more about traders stepping back from an ostensibly crowded AI trade.”
But strong gains in Eli Lilly and Super Micro Computer lent support to the market. Shares of the drugmaker rose 7.1% after the company forecast 2026 profit above Wall Street expectations.
Super Micro Computer’s shares jumped 10.3% after the company raised its annual revenue forecast on sustained demand for its AI-optimized servers as companies ramp up data-center capacity.
At 07:00 a.m. ET, Dow E-minis were up 202 points, or 0.41%, S&P 500 E-minis were up 21.25 points, or 0.31% and Nasdaq 100 E-minis were up 28 points, or 0.11%.
Alphabet rose 1.3% ahead of its results, due after markets close, while Amazon edged up 0.4% before its earnings report on Thursday.
Markets will scrutinize the results from the “Magnificent Seven” for evidence that massive capital-spending plans are yielding the kind of returns that justify their lofty valuations.
At the same time, the increasingly crowded AI trade has been pushing investors toward undervalued small caps and other overlooked corners of the market.
The small-cap Russell 2000 and the mid-cap S&P 400 ended up 0.3% and 0.2% higher, respectively, on Tuesday. The Russell 2000 was on track for a weekly gain of more than 1%, versus a modest decline for the S&P 500.
Volatility remained high. Wall Street’s “fear gauge”, the CBOE index, was at 17.57 points, after touching its highest level in two weeks in the prior session.
Uber shares fell 8.4% on forecasting first-quarter adjusted profit below estimates.
Meanwhile, U.S. President Donald Trump signed a spending deal into law on Tuesday, ending a partial government shutdown that had snarled the release of key labor-market data this week.
The government is yet to announce when the key nonfarm payrolls and JOLTS data will be released. In their absence, traders are now focusing on ADP’s national employment print for January that is due at 8:15 a.m. ET.
Corporate earnings highlighted the push-and-pull between higher costs and a cautious consumer amid economic uncertainty. Mondelez forecast a subdued year, warning that price increases are deterring cost-conscious shoppers amid macro uncertainty. The Cadbury owner’s shares fell 4.1%.
Chipotle Mexican Grill slid 5.7% after the burrito chain said it expects to raise menu prices this year, while projecting margins to remain under pressure as diners pull back on eating out.
(Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Shilpi Majumdar and Shinjini Ganguli)
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