Global financial markets witnessed a significant surge on Thursday, propelled by stellar quarterly earnings reports from technology behemoths Microsoft and Meta Platforms, signaling a robust era of growth fueled by substantial investments in artificial intelligence.
The positive momentum saw the S&P 500 climb 0.6% and the Nasdaq Composite advance 1.2%, with both indices reaching unprecedented record highs at the market’s open. While the Dow Jones Industrial Average showed a more modest increase of 0.2%, the broader market sentiment remained overwhelmingly bullish, extending July’s impressive gains for major benchmarks.
Microsoft’s shares surged by 6%, securing its place in the exclusive $4 trillion market capitalization club, a testament to its formidable cloud computing service, Azure, which reported annual revenues exceeding $75 billion. Concurrently, Meta Platforms witnessed an impressive 11.5% jump, buoyed by an optimistic third-quarter sales forecast that comfortably surpassed analyst expectations, underscoring the profound impact of their aggressive AI infrastructure expenditures.
Both tech giants confirmed their commitment to substantial capital expenditures, with Meta projecting between $66 billion and $72 billion for the full year and Microsoft anticipating over $30 billion in fiscal first-quarter capital expenditures. These massive investments are expected to significantly benefit chipmakers like Broadcom (AVGO) and AMD, as analysts at Citi highlighted their critical role in supplying the necessary hardware for this burgeoning AI infrastructure.
While analysts generally lauded Microsoft’s continued momentum in generative AI, reinforcing its status as a core holding for investors, some expressed a cautious optimism regarding Meta’s AI spending. Morgan Stanley analysts acknowledged the strength of Meta’s core business in funding these ventures but noted a degree of unease concerning the sheer scale and ‘cavalier nature’ of Mark Zuckerberg’s financial outlay into the new superintelligence team.
Beyond the tech sector, market participants also closely monitored broader economic indicators and geopolitical developments. U.S. Treasury Secretary Scott Bessent’s optimistic remarks on potential trade agreements with China added to the positive sentiment, even as concerns lingered over the August 12 tariff truce deadline. Furthermore, recent data from the personal consumption expenditures price index showed June inflation slightly hotter than anticipated, yet within manageable bounds given the overall economic picture.
Amidst the tech-driven rally, other corporate news emerged, including Moderna’s strategic decision to reduce its workforce by 10% by late 2025, reflecting shifts in the vaccine market. Conversely, Alignment Healthcare experienced a significant surge following robust second-quarter results and promising guidance, underscoring the diverse performance across different sectors. Market strategists, however, hinted at a potential loss of “glass-half-full bias” in the broader market, suggesting a period of consolidation might be on the horizon following a prolonged bullish run.
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