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July 30, 2026 - 13:08
5 minutes
(Bloomberg) — US stocks rose as strong growth at Microsoft Corp. reassured investors that expensive bets on AI are starting to pay off, outweighing resurgent worries about inflation that are pummeling long-dated bonds.S&P 500 futures climbed 0.5%. Nasdaq 100 contracts bounced 1.1% after the index slipped into a technical correction. Microsoft jumped 9.3% in early trading as its cloud unit grew at the fastest clip in four years and the company held the line on spending.Yields on 30-year Treasuries rose three basis points, extending their run at the highest level since 2007. The dollar fell for a fifth straight day. Oil fluctuated, with Brent trading near $90 a barrel as the US retaliated against Iranian strikes on American forces.Traders are navigating a complex backdrop as they factor in volatility in the artificial-intelligence trade after a strong rally, sharp swings in oil prices and a Federal Reserve that’s offering little guidance on policy.After the Fed kept rates on hold for a fifth straight meeting, investors are growing increasingly concerned that Fed Chair Kevin Warsh won’t manage to rein in inflation. Amid a slate of earnings from the biggest AI spenders, traders are also looking for signs that those vast outlays will pay off.While Microsoft’s results were well received, Meta Platforms Inc. dropped 7.3% after a disappointing revenue forecast. Markets will get another look at the health of Big Tech when Amazon.com Inc. and Apple Inc. report after the close.“We’ve seen the hyperscalers that have been wanting to spend more without backing up with profits getting penalized,” said Rory McPherson at Magnus Financial Discretionary Management. “But then you have Microsoft, which isn’t spending any more than it forecast and is growing its cloud business. That’ll remain key, particularly for Amazon.”Attention turns Thursday to an update on the Fed’s preferred inflation gauge. June’s monthly headline personal consumption expenditures reading is expected to turn negative, driven largely by lower energy prices. The core annual print is seen remaining well above the Fed’s 2% target. Investors will also get a fresh reading on the state of economic activity and consumer spending.In the UK, the Bank of England held its key interest rate at 3.75%, with three out of nine policymakers voting for a quarter-point hike. While the decision was widely expected, markets remain almost evenly split on September.While Microsoft and Meta had diverging fortunes in premarket trading, beaten-down chip stocks got a boost after Samsung Electronics Co. posted a 250-fold surge in chip profits and said it expects memory shortages to worsen.An exchange-traded fund tracking the Philadelphia Stock Exchange Semiconductor Index rose 2.8%, signaling a selloff totaling 16% over five days may have found a floor.“The earnings season is broadly good for US tech, but there’s clearly a rotation ongoing from chips to hyperscalers,” said Claudia Panseri, chief investment officer at UBS Wealth Management in France. “Semiconductor stocks, even if they beat expectations, rarely manage to rise.”Money markets are fully pricing in a Fed rate hike only by December. Katharine Neiss, chief European economist at PGIM, warned that officials may be left with little choice but to begin raising rates earlier.“That hawkish tilt is going to come in September, with three sequential hikes,” Neiss told Bloomberg TV. “Clearly there is a big risk here, because its got a whiff of discretionary monetary policy which we know doesn’t work. The markets could bully him into perhaps even a 50 basis-point hike.”Corporate Highlights:Adidas AG shares fell the most on record after the German brand’s marketing spending for the football World Cup resulted in lower-than-expected quarterly profit. Societe Generale SA raised its profitability target and announced a new share buyback, showing how Chief Executive Officer Slawomir Krupa is making progress less than two months before presenting his next strategy. Samsung Electronics Co. posted a 250-fold surge in chip profits and now expects memory shortages to worsen next year, reflecting the relentless pace of a global AI infrastructure buildout. Stellantis NV’s profitability remained under pressure in the second quarter from intensifying competition in Europe, where Chinese brands are expanding with affordable electric and hybrid models. Some of the main moves in markets:StocksS&P 500 futures rose 0.5% as of 7:04 a.m. New York time Nasdaq 100 futures rose 1.1% Futures on the Dow Jones Industrial Average rose 0.3% The Stoxx Europe 600 rose 0.5% The MSCI World Index rose 0.2% CurrenciesThe Bloomberg Dollar Spot Index fell 0.3% The euro was little changed at $1.1477 The British pound rose 0.2% to $1.3394 The Japanese yen rose 0.4% to 162.77 per dollar CryptocurrenciesBitcoin rose 1.6% to $64,465.53 Ether rose 1.7% to $1,914.68 BondsThe yield on 10-year Treasuries advanced one basis point to 4.69% Germany’s 10-year yield advanced one basis point to 3.17% Britain’s 10-year yield declined one basis point to 5.02% CommoditiesWest Texas Intermediate crude fell 0.7% to $83.91 a barrel Spot gold rose 0.3% to $4,078.77 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Neil Campling and Julien Ponthus.©2026 Bloomberg L.P.
