Google set to prop up Nasdaq after biggest drop in over two months

The Nasdaq was set to rise on Wednesday as record quarterly earnings from Google-parent Alphabet helped heavyweight technology stocks steady after their worst sell-off in more than two months in the previous session.

Shares of Alphabet Inc jumped 3.6% in premarket trading as a surge in advertising spending boosted its results. Facebook Inc, which competes with Google in web ad sales and is slated to report results late on Wednesday, rose 1.6%.

Wall Street’s main indexes have scaled record highs this month on hopes of stellar corporate results amid a broader economic recovery, but the pace of gains has slowed recently due to a deepening regulatory crackdown in China and fears of a quicker-than-expected tapering of monetary policy.

All eyes on Wednesday will be on the outcome of the Federal Reserve’s two-day meeting, with investors looking for comments on how the double whammy of rising inflation and a spike in COVID-19 cases would impact the central bank’s plan to start withdrawing its massive stimulus.

The June reading of the personal consumption expenditures price index – the Fed’s main inflation measure – is due on Friday.

Nasdaq 100 e-minis were up 0.34% by 8:21 a.m. ET after the broader Nasdaq Composite index posted its biggest daily percentage fall since May 12 on Tuesday.

Dow e-minis were up 0.01% and S&P 500 e-minis were up 0.05%.

Other technology behemoths posted mixed quarterly results late on Tuesday, with Apple Inc slipping 0.7% after it forecast slowing revenue growth. The stock is still up about 10% this year after jumping 81% in 2020.

Microsoft Corp gained 1.1% as a boom in cloud services helped it beat Wall Street expectations for revenue and earnings.