Global stock markets experienced a technology-driven rally as gains in AI-related assets increased optimism that recent selling pressure might be ending. Analysts stated that demand for artificial intelligence appears sustainable, suggesting that the recent selloff may have been an overreaction to concerns regarding capital spending. [claim:55, claim:56]
In the United States, the Dow Jones Industrial Average gained 1.19%, the S&P 500 rose by 1.66%, and the Nasdaq index rose by 2.78%. [claim:18, claim:19, claim:20]
Big Tech performance and semiconductor surges
Microsoft shares rose by 15.5% following growth in Azure cloud service revenue and capital spending outlooks. [claim:12] Semiconductor firms also saw significant gains, with SK Hynix rising 29.7%, Samsung Electronics by 25%, Micron Technology by 18.4%, and AMD by 13%. [claim:16, claim:17, claim:36, claim:37]
Amazon reported a 244.9% surge in second-quarter net income to $62.6 billion, leading to a 10.4% rise in its shares during after-hours trading. [claim:23, claim:24] Apple's net income for the period ending in June rose 27.1% to $29.8 billion, though its shares fell by 6.1% in after-hours trading amid expected sales declines from supply chain issues. [claim:21, claim:22] Meta's revenue increased 28% year-on-year to $60.8 billion, but shares declined 7.95% following a reported drop in second-quarter free cash flow, despite a reported 14% decrease in net income to $15.85 billion. [claim:13, claim:14, claim:15]
Amazon second-quarter net income surge
US economic indicators and monetary policy
The US economy grew by 1.5% in the second quarter, a slowdown compared to the first quarter. [claim:1, claim:2] The US personal consumption expenditures (PCE) price index, the Federal Reserve's inflation indicator, decreased by 0.1% month-on-month in June, while the core PCE rose by 0.1% monthly and 3.3% annually. [claim:3, claim:4] Initial jobless claims rose to 197,000 for the week ending July 25, remaining below market expectations. [claim:5]
Slowing growth and declining personal spending have increased optimism that the Federal Reserve could maintain interest rates for a longer period, weakening expectations for a second rate hike. [claim:6]
Central Bank decisions and global markets
The Bank of England maintained its policy rate at 3.75% following a 6-to-3 vote. [claim:25] Governor Andrew Bailey was among the six members who voted to keep the rate unchanged, while three members voted to increase the rate by 25 basis points to 4%. [claim:26, claim:27] Bailey stated that inflation is declining faster than expected, but the war in the Middle East continues to cause energy prices to remain high and volatile. [claim:28]
In Japan, the Bank of Japan maintained its policy rate at 1%. [claim:38] The Nikkei 225 rose 4% near Friday's close, and Tokyo's CPI rose 2% in July. [claim:40, claim:43] The South Korean Kospi index saw growth, with reports indicating a 16% increase [claim:44] and others noting a record surge of almost 18% on Friday. [claim:65]
Commodities and Currencies
Brent crude oil prices fell by 1.4% to $85.4 per barrel. [claim:9] Gold prices per ounce decreased by 0.5% to $4,082. [claim:11] The US 10-year Treasury yield decreased by 3 basis points to 4.65%. [claim:8] The US Dollar Index increased by 0.1% to 100.2 amid geopolitical uncertainties. [claim:10]
In Turkey, the Borsa Istanbul BIST 100 index closed at 13,292.93, a 1.55% decrease. [claim:47]