CORRECTED-US STOCKS-S&P, Nasdaq futures rise as Apple, Amazon forecasts lift sentiment

Oct 31 (Reuters) - S&P 500 and Nasdaq futures gained on Friday after upbeat forecasts from Apple and Amazon helped soothe nerves a day after the indexes logged their steepest drop in more than three weeks.

Amazon's AMZN.O shares surged 11.5% in premarket trading after the company forecast quarterly sales above estimates on the back of its cloud revenue rising at the fastest clip in nearly three years.

Apple AAPL.O rose 2.3% as its forecasts for holiday quarter iPhone sales and overall revenue surpassed Wall Street expectations.

With all but Nvidia NVDA.O among the so-called "Magnificent Seven" having reported quarterly results, investors got a fresh look at how aggressively Big Tech is spending on artificial intelligence. The group - which makes up roughly 35% of the S&P 500's weight - plans to funnel billions into chips and data centers to power AI ambitions.

The spending spree, however, has spooked markets.

On Thursday, the S&P 500 .SPX and Nasdaq .IXIC posted their steepest intraday declines since October 10, with the benchmark index closing at its lowest in more than a week.

Shares of Microsoft MSFT.O and Meta META.O led losses after their guidance flagged heavier AI-related outlays, stoking concerns over whether such investments can sustain long-term growth.

At 4:18 a.m., Dow E-minis YMcv1 were up 30 points, or 0.06%, S&P 500 E-minis EScv1 were up 42.75 points, or 0.62%, while Nasdaq 100 E-minis NQcv1 were up 280.25 points, or 1.09%

All three indexes are poised for their third straight weekly rise.

Of the 278 companies in the S&P 500 that have reported earnings to date for the third quarter, 83.1% have beaten analysts' expectations, according to data compiled by LSEG.

MONTHLY GAINS DESPITE TEMPERED FED OUTLOOK

The tech-heavy Nasdaq was on track for its seventh consecutive monthly advance, its longest streak since January 2018. The S&P 500 and blue-chip Dow were headed for their sixth.

While expectations for faster Federal Reserve rate cuts buoyed stocks earlier in the month, markets are still adjusting to a shift in the Fed's policy outlook after the central bank delivered a widely expected quarter-point rate cut but signaled that another move in December was not a "foregone conclusion."

The Fed's cautious language prompted traders to scale back bets on a third cut this year, with futures now pricing a 67.9% chance of a similar-sized move in December, down from nearly 90% earlier in the week.

October proved challenging for investors and policymakers alike. A government shutdown delayed key economic data releases, leaving markets and the Fed with limited visibility on the economy's health.

In other premarket moves, Netflix NFLX.O rose 3.4% after Reuters reported it was actively exploring a bid for Warner Bros Discovery's WBD.O studio and streaming business.

Warner Bros rose 2.5%.

Western Digital WDC.O jumped 11.5% after forecasting quarterly earnings above Wall Street estimates.

Strategy MSTR.O rose 6.9% after posting a profit in the third quarter, compared with a loss a year earlier.