The stock market rallied Thursday as investors returned to technology and semiconductor stocks following a sharp selloff tied to the Federal Reserve’s decision to hold rates steady. The Nasdaq Composite finished 2.8% higher at 25,122.18, ending a six-day losing streak, while the Dow Jones Industrial Average surged 613.92 points, or 1.2%, to 52,208.06. The S&P 500 climbed 1.7% to settle at 7,437.63.
The recovery came one day after the Fed’s July 29 meeting, when the Dow plunged more than 1,100 points—its worst decline since April 2025—as investors worried the central bank was falling behind in its fight against inflation. On Thursday, a shift in focus toward corporate earnings helped reverse that damage.
Microsoft led the charge, with shares jumping 16% after reporting fiscal fourth-quarter revenue of $90.01 billion, beating analyst estimates of $87.62 billion. More importantly, Azure cloud services grew 43% at constant currency, topping Street forecasts of 40.2% growth. The company also disclosed that Azure revenue in fiscal 2026 surpassed $100 billion for the first time, signaling strong demand for artificial intelligence infrastructure.
The Microsoft surge pulled semiconductor stocks higher as well. The iShares Semiconductor ETF (SOXX) rose more than 8%, with Micron Technology surging 18% and Advanced Micro Devices climbing more than 13%. Memory stocks extended those gains, and South Korea’s SK Hynix jumped more than 17%. According to JPMorgan analysts, hedge funds and other large investors had been forced to sell tech and chip holdings to reduce debt levels, but that deleveraging process accelerated faster than expected and likely neared completion—removing a key source of selling pressure.
Not all mega-cap tech benefited. Meta Platforms fell more than 8% after posting earnings per share of $6.18 for the latest quarter, missing analyst estimates by $1.04 per share. The company also issued a third-quarter revenue forecast between $61 billion and $64 billion, below the consensus estimate of $63.15 billion. “This is ultimately a tale of two AI investment strategies,” said Stephen Evans, chief investment officer at Pave Finance. “One company is increasing profits while spending heavily, while the other is allowing those costs to eat into its bottom line.”
The information technology sector as a whole posted its best day in more than a year, adding nearly 5% and becoming the top performer among the 11 S&P 500 sectors. The recovery pulled the tech sector into positive territory for the week and reinforced its year-to-date gain of more than 16%.
Sources
- CNBC — Full market recap with Nasdaq, Dow, and S&P 500 closing figures; Microsoft earnings and Azure growth details; semiconductor rallies; Meta earnings miss; JPMorgan deleveraging analysis; sector performance.
- Wall Street Journal — Nasdaq 2.8% surge confirmation; market rally details; Microsoft and tech stock gains.
- Reuters — Fed rate decision context (3.5%-3.75% range held); Microsoft rally and 30-year Treasury yield movement.
- TradingView — Dow 614-point gain verification; Nasdaq 2.8% rise confirmation; S&P 500 1.7% gain.
