Stocks shot up after stellar reports from large cap tech, especially Microsoft and Meta Platforms. Microsoft’s shares surged by 8% after the tech giant revealed its fiscal fourth-quarter earnings, which came in at $3.65 per share, significantly surpassing analysts’ expectations of $3.37 per share. Microsoft’s remarkable growth led the company’s market cap to soar past $4.1 trillion during after-hours trading. With this move, the tech behemoth is inching closer towards Intel’s admission into the exclusive $4 trillion market cap club alongside Nvidia.
Microsoft’s fiscal Q1 report blew through earnings estimates. It provided a revenue beat that shocked analysts, though the exact number is still under wraps. The company’s results have contributed to its status as part of the “Magnificent Seven,” a group of high-performing tech stocks that have driven market growth.
Microsoft’s shares enjoyed a big pop recently, evident on its five-day stock chart. Analysts are hoping that this positive momentum lasts, particularly if the market conditions remain favorable.
Meta Platforms further accelerated the bull move by having shares jump 11%. This spike came on the heels of their issuance of an upbeat sales forecast for the third quarter. The social media giant’s projections broke through to exceed the estimates set by Wall Street, sending investor confidence soaring even more.
Microsoft and Meta just backed up those words with big-time action. At the same time, Alignment Healthcare took off during after-hours trading after posting impressive second quarter earnings that topped analysts’ estimates and provided bullish guidance for the company’s upcoming performance.
With the ongoing boom in the tech sector, every major market index is experiencing great days themselves. As of this writing in mid-July, the S&P 500 is up more than 3%. The Nasdaq Composite, on the other hand, has soared by about 5% over that same period.
Yet, in spite of this rosy picture, troubling clouds loom on the fiscal horizon. President Donald Trump publicly criticized Federal Reserve Chair Jerome Powell after the central bank decided to hold interest rates steady. Trump expressed his dissatisfaction with Powell’s leadership, stating:
“Jerome ‘Too Late’ Powell has done it again!!! He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair.” – Donald Trump
He wouldn’t let up in voicing his frustrations over the economic impact of Powell’s choices. In truth, he said, these choices are costing the country trillions of dollars.
Market analysts are split on the prevailing mood. Ross Mayfield commented on the prevailing optimism:
“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, like slightly hawkish comments in the FOMC presser.” – Ross Mayfield
David Russell highlighted potential risks ahead, cautioning that investors may need to confront economic realities that could dampen sentiment:
“The market could be losing its glass-half-full bias as the realities of tariffs and seasonality kick in.” – David Russell
No amount of red flags is scaring many investors away. They’re still fixated on the tech sector’s continued robust performance and what that will mean for fueling more growth in the weeks ahead. As many other companies set to report earnings soon, analysts will be watching closely for signals in the market reaction and investor sentiment.