Microsoft leads the bounce, and the Nasdaq finally breathes

Thursday, July 30, brought a sharp reversal after the prior session's Fed,driven selloff. The Nasdaq Composite climbed 2.8% to 25,122.18, snapping a six,day losing streak. The S&P 500 rose 1.7% to 7,437.64, while the Dow Jones Industrial Average added 613.92 points, or 1.2%, to 52,208.06, according to CNBC.

The better lead angle this morning is not another rates shock. It's that equity investors briefly got what they've been asking for all summer: proof that at least one mega,cap is turning enormous AI spending into real revenue acceleration. That mattered because the market has spent weeks punishing anything that looked like capex without payoff. Thursday's rebound said the AI trade isn't dead. It's getting far more selective.

Microsoft wins, Meta loses, and the AI trade gets pickier

Microsoft shares jumped about 15% to 16% after earnings, its best day since 2008, after the company reported 43% Azure growth and said Microsoft 365 Copilot had topped 30 million paid seats, CNBC reported. The move helped spark a broader semiconductor rally, with Micron up 18% and AMD up more than 13%, according to the same market coverage from CNBC.

Meta went the other way. The stock fell roughly 8% after soft revenue guidance and a 91% year,on,year drop in free cash flow to $784 million, underscoring how impatient investors have become with AI spending that dents margins before it boosts sales, per CNBC. That split matters more than the index bounce itself. Traders are no longer rewarding AI exposure on faith alone.

Apple stumbles after the bell while Amazon gets the market's vote

Late Thursday earnings reinforced that same theme. Apple fell 7% in premarket trading Friday even after beating on quarterly revenue and profit, because guidance for the current quarter disappointed and management pointed to supply constraints tied to memory and chip availability, CNBC reported. CNBC said Apple guided to 9% to 11% revenue growth, below analyst expectations for about 12%.

Amazon, by contrast, was up 12% in premarket trading after reporting 37% year,on,year AWS growth. Investors looked through a higher capital spending forecast of $220 billion for the year because cloud demand appeared strong enough to justify it, according to CNBC. That is actionable for today's session: the market is still happy to fund AI buildouts, but only where demand is visible and near,term.

Treasury yields are still the real constraint on risk

Even after Thursday's stock rebound, the bond market hasn't relaxed. Reuters reported that Fed Chair Kevin Warsh's insistence that inflation would be brought down, without signaling a near,term rate hike and while hinting the Fed could revisit its inflation framework, helped send the 30,year Treasury yield above 5.2% on Wednesday, a 19,year high, with the rise extending on Thursday, via Reuters.

Official Treasury data show July 30 yields were published after the close, while market reporting and live rate trackers have the 30,year around 5.21% on Friday morning, keeping long,end financing costs near their highest since 2007, according to the U.S. Treasury and Trading Economics. If yields stay here, Thursday's equity relief rally could prove fragile, especially for expensive growth names outside the biggest winners.

Inflation data improved, but not enough to settle the Fed debate

The latest inflation print offered some relief, though not a clean all,clear. The Bureau of Economic Analysis said the headline PCE price index rose 3.7% year over year in June, down from 4.1% in May. Core PCE eased to 3.3% from 3.4%, according to the BEA and the BEA's core PCE release.

That deceleration helps explain why equities could rally on earnings even with rates elevated. But it also explains why the Fed debate is getting messier, not simpler. Inflation is cooling, yet still well above target, and the bond market appears unconvinced the central bank has a credible path back to 2%. For traders, that means every strong growth print and every commodity spike will still be filtered through the rates lens.

Oil stays firm, gold slips, and crypto remains a side story

Commodities are still feeding the inflation argument. Crude was around $84.33 a barrel Friday, up 0.89% on the day and nearly 23% over the past month, according to Trading Economics. Brent was indicated near $88.30, up about 1.1%, based on market data compiled by EnergyRiskIQ. The broader geopolitical backdrop still matters here, with investors watching Middle East shipping and supply risks after a volatile July.

Gold eased to about $4,053 an ounce, down 1.23% on the day, suggesting some haven demand has cooled as equities rebounded, according to Trading Economics. In crypto, Bitcoin was hovering near $63,600 to $64,000 and Ethereum around $1,900, showing only modest moves versus the swings in big,cap tech and rates, based on live market pricing from CoinMarketCap and CoinMarketCap. Unless crypto breaks that range, it's secondary to the macro story this morning.

What to Watch Today

Apple and Amazon cash,session reaction after the sharp split in premarket trading, with Apple down about 7% and Amazon up about 12%, per CNBC.
Whether Microsoft's blowout quarter can keep lifting semis and AI infrastructure names after Thursday's surge, according to CNBC.
The 30,year Treasury yield. If it stays above 5.2%, expect renewed pressure on long,duration growth and rate,sensitive sectors, as highlighted by Reuters.
Oil's next move above $84 WTI and near $88 Brent, since another leg higher would complicate the improving inflation trend, according to Trading Economics.
Any Fed speak or market chatter tied to Jackson Hole after Warsh hinted the central bank could revisit its policy framework, per Reuters.