US stock futures advanced on Thursday, with the Dow Jones Industrial Average gaining over 200 points in early trading, as robust earnings from Microsoft and softer inflation data helped markets recover from a sharp sell-off. The Nasdaq Composite climbed 1.68%, rebounding from correction territory after the Federal Reserve’s decision to hold rates steady triggered a broad decline a day earlier.
Microsoft shares surged as much as 15% after reporting an 18% jump in quarterly revenue to $90 billion and Azure cloud growth of 43%. The company’s capital expenditure outlook came in below expectations while it projected continued cash generation, easing worries that heavy AI infrastructure spending would erode profitability. The upbeat results lifted the iShares Semiconductor ETF (SOXX) by more than 5% and improved sentiment across the tech sector.
In contrast, Meta Platforms tumbled nearly 10% after announcing a 91% plunge in second-quarter free cash flow to $784 million and issuing weaker revenue guidance, underscoring investor concerns over the huge costs of AI development. Qualcomm also fell on a profit warning tied to declining Apple-related revenue.
Economic data painted a mixed picture. Second-quarter GDP grew at an annualized 1.5%, missing the 1.8%–2.1% forecast, while the core PCE price index, the Fed’s preferred inflation gauge, rose just 0.1% month-on-month, below the 0.2% estimate. The annual rate held at 3.3%, in line with projections. The softer inflation reading came a day after the Federal Reserve kept rates in the 3.50%–3.75% range, though three officials dissented in favor of a hike.
Despite the rebound, conviction remained limited. The 30-year Treasury yield touched 5.239%, its highest since 2007, and Brent crude hovered around $91 a barrel on geopolitical tensions. Investors now await quarterly reports from Apple, Amazon, and Coinbase after the closing bell, which could further sway risk appetite and indirectly impact digital asset markets.
