U.S. stocks are bouncing back Thursday after Microsoft leaped on its latest profit report and computer-chip companies clawed back some of their big recent losses.
The S&P 500 rose 0.9% and recovered more than half its drop from the prior day, which was its worst in seven weeks. The Dow Jones Industrial Average was up 250 points, or 0.5%, as of 9:35 a.m. Eastern time. The Nasdaq composite, which is full of chip stocks and others in the artificial-intelligence business, jumped 1.8% a day after it fell 9.8% below its record set last month.
Microsoft led the way and leaped 15.2% after reporting a stronger profit for the latest quarter than analysts expected. Growth was strong for its Azure cloud business, and CEO Satya Nadella said it reflects how customers are using Microsoft to move into AI.
Perhaps just as importantly for Wall Street, Microsoft did not announce a big increase in how much it plans to spend on AI investments, something that several other Big Tech rivals have done. Worries are high that such spending is eating into companies’ cash flows and may not be worth it if AI does not produce as much productivity and profits as promised.
Meta Platforms helped demonstrate such fears after falling 8.9%. The parent company of Facebook and Instagram reported a weaker profit for the latest quarter than analysts expected, even though it made slightly more in revenue than expected.
