Stocks jumped out of the gate Thursday and stayed higher through the close as well-received earnings from Microsoft (MSFT) overshadowed a disappointing reaction to Meta Platforms’ (META) quarterly results. Market participants also kept an eye on a busy economic calendar and surging long-term Treasury yields, though these did little to shift today’s price action.
At the close, the blue-chip Dow Jones Industrial Average was up 1.2% at 52,208, the broader S&P 500 was 1.7% higher at 7,437, and the tech-heavy Nasdaq Composite had surged 2.8% to 25,122.
And in the bond market, long-term yields continued to climb, with the 10-year Treasury yield closing up 5.5 basis points at 4.677% and the 30-year yield jumping 7.8 basis points to 5.221%, both near their highest levels since 2007.
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This comes as rising bond yields sank stocks on Wednesday in reaction to the Federal Reserve’s split decision to keep interest rates steady, even as inflation sits well above the central bank’s 2% target.
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“The reluctance to lift generated short-term credibility damage, driving a dramatic steepening across the Treasury curve as bond vigilantes stood up and said, ‘wait a minute,’ resulting in purchases at the shorter tenors alongside selling at the long end,” explains José Torres, senior economist at Interactive Brokers.
June PCE eases on falling energy prices, GDP slows
Markets received another inflation update today with the release of June’s Personal Consumption Expenditures Price Index (PCE). According to the Bureau of Economic Analysis (BEA), headline inflation was down 0.1% month over month and up 3.7% year over year.
This was much better than May’s monthly and annual increases of 0.4% and 4.1%, respectively, and came as energy prices tumbled roughly 20% in June. Core PCE, which excludes volatile food and energy costs, also eased in June, rising 0.1% month over month and 3.3% year over year.
In a separate release, the BEA said that second-quarter gross domestic product (GDP) was 1.5% higher in Q2 — slower than Q1’s 2.1% increase. The headline number isn’t as worrying as it seems, though, as surging imports were the main drag on economic growth in the second quarter. The data also showed that consumer spending and investments were strong.
“Despite moderating inflation, strong domestic activity across consumption and business investment will keep the Fed diligent about the risks overheating could have on the inflation trajectory,” says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “We continue to expect the Fed to be patient as it awaits more inflation data.”
Microsoft gains $500 billion in value after earnings
In addition to a busy day of economic reports, Wall Street had a lengthy earnings calendar to sift through. Microsoft‘s earnings were among the most noteworthy.
The tech giant jumped 15.5%, its biggest one-day gain since 2008. It also added $450 billion in market value — the most ever for a company in one day, beating out Nvidia (NVDA, +2.7%), which gained $440 billion in market cap on April 9, 2025, according to The Wall Street Journal.
For its fiscal fourth quarter, Microsoft reported higher-than-expected earnings and revenue, with its results boosted by a 43% year-over-year revenue growth in its Azure cloud segment.
And while MSFT said it expects fiscal 2027 capital expenditures to be up year over year, Chief Financial Officer Amy Hood also said she believes the company will remain free cash flow positive.
“Microsoft reported a very strong quarter and it struck the tone markets are looking to hear as the key drivers of growth came from the cloud and AI divisions,” says Brian Mulberry, chief market strategist at Zacks Investment Management. And the blue chip stock‘s reaction indicates “that investors are finally excited about Microsoft again.”
Meta stock posts its longest losing streak on record
While the Facebook parent reported a second-quarter revenue beat, it fell short on the bottom line and gave lower-than-expected third-quarter revenue guidance.
And, as Meta ramps up spending on artificial intelligence initiatives, the company also said its free cash flow plunged 91% year over year to $784 million and it raised the low end of its full-year capital expenditures outlook.
“The report’s defining narrative is the aggressive cost absorption required to stay at the leading edge of generative AI,” says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. “It’s just not the greatest story to increase the bottom end of your capex, basically increasing the midpoint, and not showing much positive guidance on revenue expectations.”
Big Tech earnings will continue after Thursday’s close, with Amazon (AMZN, +3.9%) and Apple (AAPL, -1.4%) set to report.
