US markets opened higher on Thursday after tech giants opened in green due to strong tech earnings.
The tech heavy Nasdaq index opened 1.13% higher at market open. The benchmark S&P 500 index gained 0.66% while the Dow Jones Industrial Average was up by 0.19%.
Microsoft and Meta power market gains
Shares of “Magnificent Seven” members Microsoft and Meta Platforms surged after the market opened on Thursday after both companies reported stronger-than-expected quarterly earnings.
Microsoft climbed 5%, while Meta rallied 12%, boosting optimism in the broader tech sector ahead of the market open.
Microsoft’s gains came after the software giant posted fiscal fourth-quarter earnings of $3.65 per share, beating analyst estimates of $3.37 per share, according to data from LSEG.
The company also announced that annual revenue from its Azure cloud computing service exceeded $75 billion, reinforcing its strong position in the rapidly growing cloud infrastructure market.
Meta Platforms, the parent company of Facebook, rose sharply after providing an upbeat outlook for third-quarter sales, forecasting revenue between $47.5 billion and $50.5 billion, well ahead of analysts’ expectations of $46.16 billion.
The company’s positive guidance suggests continued strength in digital advertising and engagement across its platforms.
Investors are now awaiting earnings from other Mag-7 constituents, including Apple and Amazon, both scheduled to report after Thursday’s closing bell.
Markets digest Fed pause and inflation data
Thursday’s moves follow a mixed session on Wall Street, with the Dow Jones Industrial Average and S&P 500 closing lower on Wednesday, while the Nasdaq Composite posted a modest gain.
The market reaction came after the Federal Reserve held its benchmark interest rate steady in its July meeting, keeping the federal funds rate in a range of 4.25% to 4.50%.
The decision, however, was not unanimous. Fed Governors Michelle Bowman and Christopher Waller dissented, signaling growing division within the central bank.
Fed Chair Jerome Powell said no policy changes had been decided for September, leaving future moves data-dependent.
Economic data released Thursday added more complexity to the inflation outlook.
The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 2.6% year-over-year in June, slightly above the 2.5% estimate from economists polled by Dow Jones.
In the labor market, weekly jobless claims came in at 218,000 for the week ending July 26, narrowly below expectations for 222,000.
Market strategist Ross Mayfield, investment analyst at Baird, noted that current valuations are “stretched” and that recent comments from the Fed could lead to a short-term consolidation.
“There’s a lot of good news priced in, so I think little things on the margin can have a bigger impact when you’ve had such a run,” he told CNBC.
Trade tensions and stock movers
Elsewhere, U.S. Treasury Secretary Scott Bessent said Thursday that talks with China over tariffs are progressing, noting that both sides “have the makings of a deal.”
No details or timeline were provided, but the current truce on aggressive tariffs is set to expire on August 12.
In other corporate news, Ford Motor shares fell on Thursday.
The automaker revealed that its 2025 earnings outlook includes a $2 billion net tariff-related headwind, driven by a $3 billion gross adverse EBIT impact partially offset by $1 billion in recovery actions.
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