07/31/26

Here's what's going on in the stock market. So, good morning and happy Friday. What a difference a day makes just one day after the Fed meeting sent the Dow to its worst day and over a year. Stocks came running back yesterday. So, let's talk about what happened and what I'm watching for today. Now, the real engine of yesterday's rebound was Microsoft and it made history. On the blowout earnings, it reported the night before. Microsoft's stock surged more than 15% and added about $450 billion in market value in a single day. That is the largest one-day gain any stock has ever posted. topping an old record held by Nvidia. So to put 450 billion in perspective in one trading session, Microsoft added more value than almost every other company in the entire S&P 500 is worth. So why did Microsoft's report land so well? It's cloud business, Azure across 100 billion in annual revenue for the first time and that is proof that its massive AI spending is turning into real pain customers. So as purely the market's revised opinion of what Microsoft is worth. Now remember though that before yesterday, Microsoft had had a pretty tough year So despite yesterday's jump, Microsoft is still down over 4% for the year. But for yesterday, when a company that enormous jumps that much, it doesn't just rally on its own. It physically drags up the whole index with it. And that's why all three indices were up. The S&P 500 was up 1.66%, the Nasdaq up 2.78% and the Dow was up almost 1.2%. Now, after the closing bell yesterday, Amazon told a similar story to Microsoft, it's Cloud arm, AWS, Amazon web services, hovered a 20% increase in revenue last quarter and stock jumped about 9% after hours and is up more than 11% in premarket trading as of right now. So you could say that yesterday was a cloud day in the best way. Now, on the back of the Microsoft news and after a note from Samsung that memory chip shortages should last into 2028. Chip stocks that crashed on Monday had a wild reversal. Micron was up 18%, Sandisk up 26%, AMD up 13%, Western digital, Seagate, Lam Research all up double digits. Now, let's talk about Apple. So in Tim Cook's last 's call as CEO. Apple reported what he called its strongest June quarter ever, revenue up 16%, iPhone sales up almost 22%, and the stock is down more than 8% in pre-market trading right now. Everything sounded great, why is the stock down? Couple of reasons. So number one, the stock was already up 15% over the past month, so investors had already priced in a great result and many decided to go ahead and take profits. The report was great, but it wasn't great enough to top the very high bar that was already put in place. There are also some concerns over provide constraints and the revenue forecast was perhaps a little bit weaker than some investors would have liked to have seen. Now, in terms of the economy, we got data yesterday that showed the economy grew at a slower than expected 1.5% annualized rate last quarter. And the Fed's favorite inflation gauge finally cooled a little bit, PCE or personal consumption expenditures. So a slower economy with easing inflation takes a little bit of pressure off the Fed and makes it marginally less likely that they will raise rates at their next meeting. But in contrast, layoffs are running at a 57-year-old low. So we have have an economy that's slowing perhaps, but the labor market is still holding up okay and that's part of the reason the Fed is so torn right now with what to do. This morning, futures are pointing higher again. We have a few earnings reports from XON, Schwab, Kohlgate, Aries and a few others. Looking ahead next week is all about jobs with the big monthly employment report landing on Friday. Plus a huge late earnings next week including Palantier, AMD and Disney. For even more detail, check out the Bell Club website or my daily newsletter.