U.S. stocks staged a strong rebound on Wednesday afternoon, following a sharp drop in bond yields. The rebound continued in pre-market trade on Thursday, thanks to better-than-expected earnings by Qualcomm, Roku, PayPal, and Clorox.

At 8 a.m. ET Thursday, S&P 500 Futures traded at 4,287, up 0.73%; the Dow Jones Futures at 33,526, up 0.52%; and the tech-heavy Nasdaq Futures up 1.12%.

Traders and investors were encouraged by a sharp decline in bond yields on the long end of the curve. For instance, the benchmark 10-year Treasury bond ended Wednesday's trade at 4.78%, well below the 4.96% at the end of last week.

That's thanks to a hawkish pause by the nation's central bank, and the expectation that the U.S. Treasury Department will ease the year-end supply of bonds.

Lower bond yields are music to the ears of equity traders and investors as they make future equity cash flows more valuable when discounted to the present. That's especially true for smaller tech companies listed in Nasdaq, which rely more on future rather than present earnings to entice investors.

Thus, the rally was seen in technology shares, with Nasdaq gaining more than 200 shares in Wednesday's trade. The rally extended to Thursday morning, as Treasury bond yields continued their descent, with the 10-year Treasury bond falling to 4.67%.

Meanwhile, equities got another boost from better earnings from Qualcomm. The tech giant reported fourth-quarter financial results that beat analysts' top and bottom-line estimates. In addition, it offered a stronger-than-expected guideline, easing concerns about the state of the semiconductor industry. Qualcomm is a chip supplier to several tech companies, including Apple, which reports earnings after the markets close.

But what most excited traders and investors, who sent the company's shares 6% higher in pre-market trading, was the mentioning of AI several times during its earnings conference call.

"We have quickly established Qualcomm as a leader in on-device Gen AI for smartphones, next-generation laptops, XR, and automotive, and we are well positioned to benefit from this opportunity," said Cristiano Renno Amon, President and Chief Executive Officer. "We expect high-performance on-device AI to become a requirement over the next few years, driving content, units, or both."

Amon provided insights into how the company's Snapdragon platform beats the competition.

"First, we significantly increased the AI processing performance and power efficiency of our best-in-class NPU, CPU, and GPU," he said. "Second, we are collaborating with multiple partners and ecosystems to enable a host of consumer and productivity-based AI models running natively on our platform. Third, we're enabling multibillion parameter Gen AI models to run continuously and concurrently for multiple use cases, including multimodal."

PayPal, Roku and Clorox echoed Qualcomm's positive sentiment. They also reported better-than-expected financial results, broadening the interest in equities.

Still, Selma Hepp, Chief Economist and Executive for Research Insights at CoreLogic, is cautious for the rest of the year, as inflation is yet to be under control.

"Bumps in the road remain as most recent wage growth data suggests that labor cost pressures persist while elevated energy prices may seep into other components of inflation going forward," she told International Business Times.

Melissa Cohn, the Regional Vice President of William Raveis Mortgage, is optimistic. She expects the positive tone that followed the recent Fed meeting to continue to the end of the year, with the nation's central bank pausing interest rate hikes again in November.

"We're coming up against November 17th, when the government funding ends," Cohn says. That, coupled with war in Israel, could keep the Fed's hike pause going for a third consecutive month after its next meeting on December 12 and 13."

Qualcomm PayPal Roku