U.S. stock index futures rose on Wednesday, as Alphabet's strong quarterly results buoyed sentiment around technology megacaps, while investors also awaited crucial data to gauge the strength of the economy and the labor market.

Powering the Tech Resurgence

Alphabet Leads the Charge

Shares of Alphabet, the first of the five "Magnificent Seven" megacap stocks due to report results this week, leapt 5.5% in premarket trading after the company beat expectations for third-quarter revenue and profit on strength in its cloud business and YouTube ad sales. "Alphabet's third-quarter results should put many skeptics' minds to rest," said Gerrit Smit, manager of the Stonehage Fleming Global Best Ideas Equity Fund. "Along with positive surprises on all of the important levels, the most striking feature is that despite its continuing elevated AI capital expenditures, its operating margin has actually increased from 28% to 32%."

Megacaps Riding the Wave

Shares of other megacaps also gained ground, with Microsoft and Meta Platforms rising 2% each. Both companies are scheduled to report results after the bell. The tech-heavy Nasdaq Composite closed at an all-time high on Tuesday, underscoring the renewed investor confidence in the sector.

Earnings Season in Full Swing

Megacap results will be the most closely watched in a week packed with earnings, given the significant role they played in Wall Street's rally this year. Investors are eager to see whether heavy investment in artificial intelligence is translating into better company performances.

Economic Data in Focus

Investors were also awaiting a slew of economic data later in the day, with the ADP National Employment report as well as advance third-quarter gross domestic product figures due before markets open. Tuesday's data showed U.S. job openings dropped to more than a three-and-a-half-year low in September, leading traders to increase bets on a 25-basis-point rate cut in the November as well as December meetings of the Federal Reserve.

Political Landscape Looming

The neck-and-neck race between U.S. presidential candidates Kamala Harris and Donald Trump was also at the top of investors' minds ahead of the Nov. 5 election. The outcome could have significant implications for the markets and the broader economic landscape.

Mixed Earnings Landscape

Among companies that reported after Tuesday's close, shares of semiconductor company Advanced Micro Devices dipped 8.3% after its forecasts for fourth-quarter revenue and AI chip sales disappointed investors. On the other hand, Reddit soared 22.8% after reporting quarterly profit for the first time since going public, while Chipotle Mexican Grill lost 6.3% after it missed expectations for same-store sales growth.