Huo Xing Finance reports: On the night of July 31 and early morning of August 1, the U.S. Q2 core PCE inflation cooled, causing a sharp decline in near-term rate hike expectations. On the other hand, Microsoft’s better-than-expected earnings report appeared to restore investor confidence in AI, combined with the end of selling pressure following the liquidation of major AI funds, triggering a short squeeze rally in tech and momentum stocks. The S&P 500 closed up 1.66%, while the Nasdaq 100 surged 3.4%, marking its third-largest single-day gain this year. According to BIT (bit.com) market data, Microsoft soared over 15%, posting the largest single-day market capitalization increase in Wall Street history and its biggest daily gain in 18 years. Additionally, memory stocks surged: SanDisk rose nearly 26%, while AI-focused stocks previously heavily weighted by Wall Street’s AI guru—Neocloud-related NBIS and IREN—gained over 27% and 30% respectively. U.S.-listed SK Hynix also saw a long-awaited rebound, rising 17.52%. Previously, AI star stock MRVL climbed 12.18%, and Micron rose 18%. Notably, today’s foreign exchange market was highly volatile: the Japanese yen surged over 3% intraday, with Japanese media reporting renewed intervention by Japanese authorities. The U.S. dollar index briefly fell more than 0.9%, recording its largest single-day drop since January and erasing all gains accumulated since Secretary Wessel’s debut. South Korea’s foreign exchange authorities also reportedly intervened with rare dollar-selling activity on Thursday. U.S. Treasury Secretary Bessent responded, stating that Japan likely intervened in the foreign exchange market, adding that the yen “appears significantly undervalued” in his view. Finally, Apple released its third fiscal quarter results ending June 27, 2026, reporting revenue of $109.42 billion, up approximately 16% year-over-year, slightly exceeding analyst expectations. Earnings per share (EPS) rose about 29% to $2.02, nearly 7% above forecasts. Apple CFO Kevan Parekh noted that both EPS and operating cash flow for the quarter set all-time highs for the same period in the company’s history. However, market performance indicated that Apple’s seemingly strong earnings report failed to impress investors. Prior to the announcement, Apple’s stock closed down 1.4% during regular trading hours; after the report, the decline widened further in after-hours trading, falling over 4%.
U.S. inflation slows, Microsoft earnings spark tech stock rally
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Summary
U.S. Q2 inflation data revealed a cooling core PCE, easing concerns about further rate hikes. The market rally accelerated after Microsoft reported strong earnings, boosting tech and momentum stocks. The Nasdaq 100 surged 3.4%, while Microsoft shares jumped over 15%, marking its largest single-day gain in 18 years. Storage and AI-related stocks also rose sharply, with SanDisk up nearly 26% and Micron up 18%. The yen advanced over 3% amid reports of Japanese intervention, while the dollar index declined 0.9%. Apple’s Q3 earnings surpassed estimates, but shares fell following the report.
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