Feb 18 (Reuters) - U.S. stock index futures gained on Wednesday as tech stocks advanced reflecting easing AI concerns, while investors awaited minutes from the Federal Reserve's most recent policy meeting for clues on the interest-rate outlook.
Markets have been volatile, with the S&P 500 ending 0.1% higher on Tuesday after falling as much as 0.9% early in the session. The Nasdaq and the Dow also saw similar reversals.
Wall Street's main indexes have been rocked this month by worries of disruption
from rapidly improving AI tools that hit sectors from software to trucking.
Broader AI-linked and megacap technology stocks had also lost ground as investors looked for stronger evidence the heavy investments in the technology were tangibly boosting revenue and profits.
On Wednesday, most megacap and growth stocks rose in premarket trading. Nvidia was up 1.9% after the company said it had signed a multi-year deal to sell Meta Platforms millions of its current and future AI chips.
Other megacaps also advanced. Amazon.com rose 1.6% and Meta and Microsoft added 0.7% each in broad-based gains.
The release of minutes from the Fed's January policy meeting, where it held its main lending rate steady, are expected later in the day.
"With money markets pricing in another pause at next month's meeting, investors will be looking to the minutes for clues on how long the central bank may remain on hold," said Aaron Hill, chief market analyst at FP Markets.
Traders are pricing in a chance of roughly 63% for a rate cut of at least 25 basis points at the Fed's June meeting, the first with odds above 50%, according to CME's FedWatch Tool.
Later in the week, the personal consumption expenditure report - the Fed's preferred inflation gauge - will be in focus and is expected to provide insights into inflation and how it could impact borrowing costs.
Earnings season is also in focus, with chipmaker Analog Devices and contract research firm Charles River Laboratories among prominent companies reporting results before the bell.
At 05:20 a.m. ET, Dow E-minis rose 243 points, or 0.49%, S&P 500 E-minis gained 39 points, or 0.57%, and Nasdaq 100 E-minis added 161.5 points, or 0.65%.
Among early movers, Palo Alto Networks dropped 7.2% after the cybersecurity company trimmed its annual profit forecast, signaling rising costs from recent acquisitions to enhance its artificial intelligence capabilities.
Cadence Design Systems climbed 5.8% after the chip design software provider beat fourth-quarter revenue estimates.
Hard-disk drive maker Western Digital plans to raise $3.17 billion by selling some of its stake in former unit Sandisk through a secondary share sale, sending Sandisk's shares falling 2.4%.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)
