Nasdaq and S&P 500 futures jumped more than 1% on Wednesday after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks, while Microsoft bucked the positive trend in megacaps ahead of a key U.S. interest-rate decision.

Market Snapshot

At 7:50 a.m. ET, Dow e-minis were up 60 points, or 0.15%, S&P 500 e-minis were up 56.25 points, or 1.03%, and Nasdaq 100 e-minis were up 321.5 points, or 1.7%.

Pre-Market Movers

Microsoft - Microsoft ‘ s fiscal fourth-quarter earnings and salesbeat Wall Street estimates but the stock fell 3.2% in premarket trading after growth at the software giant ’ s Azure cloud-computing business came up short of estimates. Revenue from Azure rose 29% on a reported basis in the quarter, below analysts ’ estimates of 30%.

AMD - AMD surged 8% after the semiconductor company reportedsecond-quarter adjusted earningsof 69 cents a share, beating estimates of 68 cents. Revenue of $5.8 billion also topped expectations of $5.7 billion. Adjusted gross margins in the period rose to 53% from 50% in the year-earlier second quarter, driven by record revenue in AMD ’ s data-center business. AMD said it expects third-quarter sales of $6.7 billion at the midpoint, higher than estimates of $6.6 billion, and raised its annual forecast for artificial-intelligence data center GPU revenue.

Nvidia - Nvidia, which makes the chips favored for training artificial-intelligence systems, rose 6.9% following AMD ’ s report.

ASML - ASML was up 7.3% after a Reuters report said the Dutch semiconductor makerlikely would be exemptfrom the Biden administration ’ s crackdown on foreign companies that sell chips to China.

Boeing - Boeing on Wednesday named aerospace industry veteran Kelly Ortberg as its new President and CEO, tasking the former Rockwell Collins executive in turning around the struggling planemaker after it reported a $1.4 billion loss. The shares gained 3.9% in premarket trading.

Pinterest - Pinterest fell 10.7% after the social media company reported better-than-expected second-quarter earnings and sales butrevenue guidance for the third quarterwas below Wall Street estimates. Pinterest said it expects third-quarter revenue of $892.5 million at the midpoint, below projections of $909 million.

Starbucks - Starbucks reported fiscal third-quarter earnings that were in line with Wall Street estimates but sales that were weaker than expected. The stock was rising 4.1%, however, after the coffee-chain said its "efficiency efforts" were ahead of expectations, which "partially offset investments associated with the cautious consumer environment."

Lemonade - Lemonade Inc. ’ s stock tumbled 12.1% in premarket trading Wednesday, after the digital insurer, which uses AI to power its business, offered soft guidance, offsetting a narrower-than-expected second-quarter loss and revenue that matched estimates.

GE HealthCare Technologies - GE HealthCare Technologies fell 0.9% after reporting second-quarter revenue that missed Wall Street expectations and as negative cash flow of $182 million widened from negative cash flow of $136 million a year earlier.

Arista Networks - Arista Networks reported second-quarter adjusted earnings of $2.10 a share, beating Wall Street expectations of $1.94, as revenue at the cloud-networking company rose 16% to $1.69 billion and came in ahead of forecasts. The stock was up 5.3%.

DuPont - DuPont rose 4.5% after the materials company reportedsecond-quarter adjusted earningsof 97 cents a share that beat analysts ’ forecasts.

Skyworks Solutions - Skyworks Solutions fell 1.1%. Fiscal third-quarter earnings at the semiconductor company matched analysts ’ estimates while revenue of $906 million topped consensus.

Match - Match Group jumped 10.2% after the online-dating company said it was seeing improvement in monthly active users and payer trends for Tinder in the third quarter.   Match also said it would be cutting 6% of its workforce.

T-Mobile US - T-Mobile US raised its full-year forecast for monthly bill-paying phone subscriber additions after adding more customers than expected in the second quarter on strong demand for its discounted unlimited plans that include streaming perks. The company's shares rose 2.9% in premarket trading on Wednesday.

Faraday Future - Faraday Future regained compliance with Nasdaq timely reporting requirements. The stock price climbed 19% on Wednesday during pre-market hours of trading.

Market News

Microsoft's Azure Growth Slows, Testing Investors' Patience

Microsoft Corp. ’ s Azure cloud-computing service posted a slowdown in quarterly growth, disappointing investors anxious to see a payoff from huge investments in artificial intelligence products.

Revenue from Azure, Microsoft ’ s main growth engine in recent years, rose 29% in the fiscal fourth quarter, compared with a 31% jump in the previous period. About 8 percentage points of the increase in the recent period was attributable to AI, up from 7 percentage points in the prior quarter.

On a call with analysts Tuesday, Chief Financial Officer Amy Hood said that although Azure growth will continue to slow in the current quarter, which ends in September, investments in data centers and servers will let the company capitalize on demand and accelerate Azure growth in the second half of fiscal 2025.

AMD Raises Forecast for AI Chip Revenue and Sees Supplies Remaining Tight

AMD on Tuesday increased its 2024 forecast for artificial intelligence chip sales by $500 million and said supplies would remain tight through 2025.

Because of surging demand, AMD CEO Lisa Su said, the company boosted its 2024 AI chip revenue forecast to $4.5 billion from a previous target of $4 billion. The supply of such chips will remain tight through 2025, Su said during a quarterly results conference call late Tuesday.

In the second quarter, AMD's data center revenue, its biggest segment, jumped 115% to $2.8 billion, just topping estimates of $2.79 billion, according to Visible Alpha. For the first time its quarterly AI chip revenue - which is largely concentrated in the data center segment - rose above $1 billion.

Japan ’ s Central Bank Hikes Key Rate Hours Before the Fed

The Bank of Japan raised its benchmark interest rate and unveiled plans to halve its bond purchases in actions that underscore its determination to normalize policy.

The BOJ raised its policy rate to around 0.25% from a range of 0 to 0.1%, according to its statement Wednesday. It also said it would reduce its monthly pace of bond buying to around ¥ 3 trillion ( $19.6 billion ) by the first quarter of 2026. The recent pace of purchases has been about double that amount.

In taking these steps, Governor Kazuo Ueda showcased his will to proceed with normalization after years in which the bank pursued an ultra-easy policy that included the world ’ s last negative interest rate until March. Wednesday ’ s actions will likely fuel speculation that one more hike may be coming this year.