Rallies for Microsoft and Meta Send Wall Street Higher
The stock market saw a positive upswing on Thursday, driven by significant rallies in tech giants Microsoft and Meta Platforms. The S&P 500 increased by 0.7% in early trading, while the Dow Jones Industrial Average made gains of 82 points. The technology sector experienced a notable boost with the Nasdaq composite climbing 1.3%. This upward movement was largely attributed to the impressive performances of Microsoft and Meta, the parent company of Facebook and Instagram.
Meta Platforms experienced a surge of 12% following its exceptional quarterly results. The company’s revenue jumped by 22% while earnings rose by 36% compared to the same quarter in the previous year. This performance was underpinned by increased advertising and a growing user base across Meta’s social media services. Despite substantial investments in artificial intelligence, the company’s financial metrics surpassed Wall Street’s expectations.
Similarly, Microsoft’s stock soared by 6%, propelled by its robust financial results that exceeded analysts’ predictions. The tech giant reported that its Azure cloud computing platform witnessed an annual revenue surge, reaching over $75 billion, a 34% increase from the previous year. Azure remains a pivotal element of Microsoft’s strategic pivot towards artificial intelligence. The company’s fiscal fourth-quarter profit rose by 24%, hitting $34.3 billion.
The positive momentum in the tech industry was further reflected in the futures market ahead of the opening bell. Nasdaq futures climbed 1.2%, S&P 500 futures increased by 0.9%, and Dow Jones Industrial Average futures saw a 0.2% rise.
Not only tech companies showcased robust performances; CVS Health also reported commendable second-quarter results, surpassing Wall Street expectations. Under new management, CVS’s revenue across its three business segments grew by at least 10%, leading to a 7.5% increase in its shares before market commencement. This positions CVS favorably following a challenging 2024 period marked by escalating costs in the healthcare sector.
Investors are also anticipating quarterly results from industry giants Apple and Amazon, which are scheduled for release after the market closes on Thursday. Meanwhile, economic analysts are keeping a watchful eye on forthcoming U.S. inflation and layoffs data, along with Friday’s anticipated Labor Department’s July jobs report.
Despite the market’s positive trajectory, concerns linger over Treasury yields which faced upward pressure after statements from Federal Reserve Chair indicated uncertainty towards potential rate cuts in September. These comments shifted the likelihood of a rate reduction from nearly 60% to 45%, reflecting ongoing deliberations over balancing employment and inflation within the economy.
Globally, the market landscape was mixed. Europe’s mid-day trading had Germany’s DAX slightly dipping by 0.1%, Britain’s FTSE 100 rising by 0.4%, and the CAC 40 in Paris going up by 0.3%. In Asia, Japan’s Nikkei 225 rose by 1.1%, helped by the Bank of Japan’s decision to maintain interest rates and revise inflation projections upwards.
Conversely, South Korea’s Kospi slid by 0.3% following a tariff agreement with the U.S., which broadened economic ties and investments between the two nations. Hong Kong’s Hang Seng index fell by 1.5%, and the Shanghai Composite Index decreased by 1.2%. The S&P ASX 200 in Australia saw a slight decline of 0.2%, while India’s BSE Sensex increased modestly by 0.2%.
In energy markets, U.S. benchmark crude oil prices fell to $69.54 per barrel, and Brent crude dropped to $71.96 per barrel. Currencies also experienced movements with the U.S. dollar strengthening against the Japanese yen, and the euro gaining marginal ground.
