Stock market today: Nasdaq soars nearly 3%, Dow and S&P 500 rebound as Microsoft posts record 1-day value gain
US stocks staged a major comeback on Thursday after a Fed-fueled sell-off, with Microsoft (MSFT) leading a tech rally as investors looked ahead to more earnings and brushed off fresh US attacks on Iran, a bond rout, and worries about AI spending.
The Dow Jones Industrial Average (^DJI) advanced nearly 1.2%, while the S&P 500 (^GSPC) rose 1.7%. The Nasdaq Composite (^IXIC) surged more than 2.8%, led by a rally in chip stocks. The gains came after the Nasdaq-100 (^NDX) index entered a correction on Wednesday.
The fortunes of Meta (META) and Microsoft stocks diverged after the two “Magnificent Seven” stalwarts reported earnings on Wednesday afternoon. Meta shares fell by about 8%, extending their historic losing streak, after the tech giant’s earnings miss added to worries about its ability to recoup AI investments.
Microsoft’s stock jumped more than 15%, to post its biggest one-day gain since 2008, after its Azure cloud business topped $100 billion in revenue for the first time. Microsoft also recorded the largest single-day gain in market value of any company.
Amazon (AMZN) is the next hyperscaler to face Wall Street scrutiny on its capital expenditures and cloud business when it reports earnings after the bell. Apple (AAPL) will also report results, with a focus on margins amid memory chip price hikes.
Traders continue to digest the Federal Reserve’s decision to hold rates steady on Wednesday as the bond market revolts, sending the 30-year Treasury yield to a multidecade high near 5.24% on Thursday. Although oil prices were flat Thursday morning, US strikes on a dozen Iranian targets overnight threatened to spiral into another escalation in the war, which could rekindle inflation.
PCE pricing data on Thursday showed inflation advancing at a slower pace in June than in the previous month, which will be welcome news for the Federal Reserve, especially as GDP data from the Commerce Department showed the US economy grew at a slower pace than expected in the second quarter.