Wall Street Soars After Microsoft, Meta Beat Forecasts

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Wall Street Soars After Microsoft, Meta Beat Forecasts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Microsoft and Meta delivered stronger-than-expected earnings, pushing U.S. stocks higher and lifting the Nasdaq by over 1%. Meta soared 12% on surging ad revenue and user growth, while Microsoft gained 6% thanks to Azure’s $75 billion milestone. Traders anticipate more volatility ahead of Apple, Amazon earnings and key U.S. economic data.

Trump Tariffs Drive Inflation Higher, Fed Holds Rates

Wall Street Tech Rally Quick Looks

S&P 500 gained 0.7%, Nasdaq jumped 1.3%, Dow added 82 points
Meta Platforms rose 12% after smashing Q2 earnings expectations
Microsoft gained 6% following strong Azure and cloud revenue results
CVS Health beat estimates and raised full-year guidance
Apple and Amazon report earnings after Thursday’s closing bell
Investors eye key U.S. inflation, jobs data this week
Rate cut speculation cools after Powell’s latest Fed update
Global markets mixed, with Asia showing steep losses in China and gains in Japan
Oil prices retreat, and U.S. dollar strengthens against yen and euro

Deep Look: Microsoft, Meta Earnings Lift U.S. Stocks Ahead of Economic Data

NEW YORK — Wall Street kicked off Thursday with a tech-powered surge as blowout quarterly results from Meta Platforms and Microsoft fueled a sharp rally in U.S. stocks. The S&P 500 rose 0.7%, while the tech-heavy Nasdaq Composite climbed 1.3%, boosted by investor optimism surrounding AI-focused giants. The Dow Jones Industrial Average added 82 points in early trading.

Meta soared more than 12% in morning hours after posting quarterly earnings of $18.34 billion, a 36% year-over-year increase, on 22% higher revenue. The growth, fueled by expanding ad revenue and an increase in daily active users on Facebook and Instagram, outpaced Wall Street’s most bullish projections. Despite pouring billions into AI infrastructure, Meta’s profitability remains robust.

“This quarter proves Meta’s AI investments are accelerating revenue while keeping costs under control,” said one analyst. “The market is clearly rewarding that.”

Microsoft’s Azure Momentum

Not to be outdone, Microsoft jumped nearly 6% after it revealed $75 billion in annualized revenue from its Azure cloud platform, marking a 34% jump from the previous year. The company’s fiscal Q4 profit reached $34.3 billion, up 24% over the same period in 2024. For the first time, Microsoft disclosed Azure’s financials, underscoring its central role in the company’s AI strategy.

Azure’s strong growth aligns with Microsoft’s broader ambition to be the dominant player in enterprise AI infrastructure, pitting it directly against rivals Amazon Web Services and Google Cloud.

CVS Health Rises on Turnaround Momentum

Healthcare giant CVS Health also gave Wall Street a lift with second-quarter results that topped expectations. Shares jumped 7.5% pre-market after the company reported 10%+ growth across all business segments and raised its full-year outlook. CVS’s strong performance marks a turnaround after a difficult 2024 that saw the sector hit hard by inflation and operational costs.

Apple, Amazon Earnings Loom

Eyes are now on Apple and Amazon, which are scheduled to release their earnings after markets close Thursday. Analysts are watching for Apple’s hardware sales trends and Amazon’s AWS growth outlook as key drivers in what could be another strong earnings cycle for Big Tech.

Fed Rate Cut Outlook Dims

Despite strong earnings, Federal Reserve Chair Jerome Powell’s comments on Wednesday tempered expectations for a near-term interest rate cut. Powell noted that while inflation has eased, it remains above the Fed’s 2% target. As a result, the central bank has held rates steady for five consecutive meetings.

Traders now peg the odds of a September rate cut at just 45%, down from 60% before Powell’s remarks, according to CME FedWatch data.

President Donald Trump has pressured the Fed to lower rates, arguing it would strengthen the economy and labor market. However, some analysts caution that combining rate cuts with Trump’s proposed tariffs could reignite inflation.

Global Markets Mixed

International markets delivered a mixed performance on Thursday:

Germany’s DAX slipped 0.1%
Britain’s FTSE 100 rose 0.4%
France’s CAC 40 gained 0.3%

In Asia:

Japan’s Nikkei 225 surged 1.1% as the Bank of Japan held rates at 0.5% but raised inflation forecasts
South Korea’s Kospi edged down 0.3% after reaching a tariff deal with the U.S. involving $450 billion in energy and investment commitments
Hong Kong’s Hang Seng dropped 1.5%, and Shanghai Composite fell 1.2%, reflecting concerns over soft manufacturing data (PMI at 49.3)
Australia’s ASX 200 declined 0.2%, while India’s Sensex and Taiwan’s TAIEX posted modest gains