Microsoft Ignites The Rebound. Chips Rip Back.

Rundown · 2026-07-31

A powerful snapback: MSFT +16% on an Azure blowout (+43%, past $100B annual revenue) revived the AI trade — Nasdaq +2.8% ended a 6-day skid, chips ripped (SOXX +8%), S&P +1.7%. But the 30Y held near 5.2% (a multi-decade high) as core PCE stayed at 3.3%.

Market Performance

• S&P 500: 7,437.63 (+1.7%) — more than recovered Wednesday's post-Fed drop
• Nasdaq: 25,122.18 (+2.8%) — best day since June; ended a 6-day losing streak
• Dow: 52,208.06 (+1.2%) — +613.92 pts; MSFT did most of the blue-chip heavy lifting
• Russell 2000: higher — small caps joined the broad, tech-led rebound
• Sector leaders: Tech (+5%+), Semis · Laggards: guidance-cut names (ALNY, FICO, LKQ)
• 10Y yield: eased modestly; 30Y held near 5.2% — a multi-decade high; bond market stays uneasy
• WTI crude: back below $84 — eased despite overnight US strikes on ~a dozen Iranian targets
• SOXX +8% — erased its 10% Mon-Wed weekly decline in a single session

Microsoft's Azure Blowout Revives the AI Trade

• MSFT +16% — a record 1-day market-cap gain; the print investors needed to see
• Azure grew 43% in constant currency (vs ~40% est) + topped $100B in annual revenue
• The milestone directly answered the capex-ROI doubt that cracked GOOGL -7% last week
• Semis celebrated alongside: LRCX +18%, SNDK +26%, a broad memory/equipment snapback
• AMZN + AAPL reported after the close — the last two Mag 7 reads land in tomorrow's tape

Soft Data vs a Restless Bond Market

• Q2 GDP slowed to 1.5% annualized — below forecast; but consumption rose 3.2% (strong)
• Core PCE held at 3.3% YoY — still well above the Fed's 2% target; headline PCE -0.1% MoM
• Soft GDP + cool monthly PCE gave the doves ammunition: Sept-hike odds fell to ~55% (from ~80%)
• But the 30Y stuck near 5.2% (highest since 2007) — the long end isn't buying the relief
• Overnight US strikes on Iran kept a geopolitical bid under oil even as WTI slipped

Notable Movers

• (MSFT) +16% — Crushed earnings; Azure grew 43% and topped $100B in annual revenue
• (SNDK) +26% — Morgan Stanley reiterated a bullish stance citing NAND shortages + a 25%+ price-increase forecast
• (CVNA) -7% — Issued a full-year adjusted EBITDA forecast below Street expectations amid a sales decline

Private Dealmaking

• Anyscale (AI app dev · Nscale) — $1.65B
• Commonwealth Fusion Systems (nuclear fusion) — $1B
• DroneDeploy (robotics/visual intel · Procore) — $845M
• Sail Biomedicines (CAR-T · J&J) — $785M
• Antora Energy (energy storage) — $550M
• K2 Space (satellite platform) — $500M

TLDR

• S&P +1.7% to 7,437.63; Nasdaq +2.8% (ended 6-day skid); Dow +614 pts; tech +5%, SOXX +8%
• MSFT +16% on Azure +43% + $100B revenue milestone — a record 1-day market-cap gain
• SNDK +26%, LRCX +18% — memory/equipment led a full chip snapback from Wednesday's rout
• Q2 GDP 1.5% (below est) but consumption +3.2%; core PCE 3.3%; Sept-hike odds fell to ~55%
• 30Y held near 5.2% (highest since 2007) — long bonds stayed restless even as stocks ripped
• CVNA -7% on a weak EBITDA guide; AMZN + AAPL reported after the close; WTI below $84

The Bottom Line

Microsoft answered the question that broke the tape last week. After GOOGL -7% made "AI-capex outrunning returns" the dominant fear, Azure grew 43% and crossed $100B in revenue — proof the spend is converting to profit — and the AI trade roared back: Nasdaq +2.8%, its first up day in seven, chips +8%. But mind the split screen: the 30Y stayed pinned near 5.2%, a multi-decade high, even as stocks surged. The equity market bought the earnings; the bond market still hasn't bought the Fed. AMZN + AAPL after the close get the final word on Mag 7 week.

_For informational purposes only. Not investment advice._