Summary of Key Highlights
On Thursday, the three major U.S. stock indices all saw significant gains (the Nasdaq rose nearly 2.8%, ending a six-day streak of declines), driven by two major positives: first, Microsoft's financial report confirmed that AI can be profitable (commercialization has been achieved); second, inflation data in June cooled down (reducing the likelihood of the Federal Reserve raising interest rates). There was a stark contrast in the financial reports of technology giants: Apple's iPhone sales exceeded expectations, but its service business underperformed, and concerns about chip shortages caused the stock to fall 6% after the market closed; Amazon's cloud business (AWS) grew beyond expectations, and AI investments led to a 9% increase in its stock price after the market closed. Microsoft's impressive AI performance drove a 15.5% rise, boosting the semiconductor sector; meanwhile, the yield on 30-year U.S. Treasury bonds reached a new high since 2007, indicating a slowdown in economic growth but reduced inflationary pressures.
Detailed Analysis
The "Dual Engines" Behind the U.S. Stock Market's Surge: AI Profitability and Lowering Inflation
- Commercialization of AI: Microsoft Provides Comfort to the Market
Microsoft's latest financial report showed that its AI business is experiencing annual revenue growth in triple digits, and management stated that it expects to achieve "positive free cash flow" in the new fiscal year (in other words, AI investments are no longer just consuming money but are generating profits). This reassured investors, who now see AI as a reliable growth driver. As a result, Microsoft's stock rose 15.5%, the largest single-day increase since 2008, and it also propelled the entire technology sector.
- Cooling Inflation: Reduced Probability of Fed Rate Hikes
The core PCE inflation index (the Federal Reserve's primary indicator) fell to 3.3% year-on-year in June, lower than in May. Market expectations for a Fed rate hike in September have dropped from 82% a week ago to 59%. With fewer rate hikes, the cost of borrowing for companies will not increase rapidly, encouraging investors to buy stocks.
A Divergent Performance Among Technology Giants: Apple Faces Challenges, Amazon Surges
- Apple: Strong iPhone Sales, but Numerous Concerns
iPhone sales exceeded expectations (54.25 billion vs. forecast of 53.86 billion), and net profits also increased. However, the high-margin service businesses (such as the App Store and Apple Music) fell short of targets (30.74 billion vs. forecast of 31.22 billion). Additionally, a "once-in-a-century" shortage of storage chips has caused issues; CEO Tim Cook mentioned that companies are competing for production capacity, and Apple may raise prices for the Mac and iPad. The new iPhone could also see price increases. Moreover, Apple's AI efforts lags behind (it relies on Google's large models for its Siri software), making September's launch a critical test. As a result, Apple's stock fell 6% after the market closed.
- Amazon: Cloud Business Booms, AI Investments Pay Off
Total revenue exceeded expectations (20.06 billion vs. forecast of 19.64 billion), with AWS growing by 37% (well above the expected 31%). Amazon also made a significant profit from its investment in the AI company Anthropic (53.4 billion). Its AI business generated annual revenue of over 25 billion, becoming a new pillar of growth. Although third-quarter guidance was weaker due to an earlier Prime Day, excluding that impact, the growth rate was still decent, leading to a 9% increase in its stock price after the market closed.
- Meta: Excessive AI Spending Leads to Cash Strains
Meta's free cash flow (actual funds received) plummeted by 91% in the second quarter, as all of it was invested in AI initiatives, putting significant financial pressure on the company. As a result, its stock fell nearly 8%.
Microsoft Drives the Semiconductor Sector
Microsoft's AI business requires a large number of chips, which has benefited the chip supply chain:
- The Philadelphia Semiconductor Index rose more than 8%, with application materials and AMD increasing by over 13%;
- Storage chips were particularly strong: SanDisk rose 26% (due to Apple's demand for storage chips), and Micron increased by 18%;
- The optical communication sector also performed well: Lumentum rose 15% (AI relies on optical modules for data transmission).
Only Qualcomm fell 2.6% due to lower-than-expected fourth-quarter earnings guidance and concerns about slower iPhone sales.
U.S. Treasury Bond Yields Reach a 19-Year High
The yield on 30-year U.S. Treasury bonds rose to 5.206% (the highest since 2007), and the 10-year yield also increased. The reason is simple:
- Investors are worried about "long-term inflation" or the possibility of the Federal Reserve maintaining high interest rates for an extended period, leading to fewer buyers of long-term bonds and thus higher yields (bond prices and yields move in opposite directions).
- Although the stock market has risen in the short term due to lower inflation, higher long-term interest rates will increase the cost of borrowing for companies, which could impact future profits—a potential risk.
Other Market Developments
- Commodities, Chinese Stocks, and Starbucks
- Commodities: Oil Prices Fall, Gold Rises
Oil prices declined (WTI crude fell 1%) due to lower energy prices; gold and silver prices rose (gold rose 1.58%), possibly driven by避险 sentiment or reduced inflationary pressures and softer interest rate expectations.
- Chinese Stocks: Slight Gains
The NASDAQ China Golden Dragon Index rose 1.05%, with Baidu, NetEase, and Alibaba gaining momentum, while Pinduoduo fell (possibly due to lower business expectations).
- Starbucks: Upgraded Outlook, Stock Price Increases
Starbucks raised its annual sales and profit forecasts (for example, same-store sales increased from at least 5% to nearly 6%), leading to a 1.64% increase in its stock price.
Overall, the main driver of the market on Thursday was the optimistic sentiment generated by the commercialization of AI and cooling inflation, which outweighed the pressure from new high Treasury bond yields. There was a clear divergence among technology giants: companies with strong AI capabilities and profitability (such as Microsoft and Amazon) were favored, while those that have invested heavily in AI without seeing returns (Meta) or face supply chain issues (such as Apple) performed poorly. The semiconductor sector emerged as the biggest winner due to the surge in AI demand.