US equities advanced on Thursday, with the S&P 500 up 1.66% and the Nasdaq rising 2.78% as technology led gains. Microsoft climbed more than 15%, adding almost $450bn in market value in a record one-day move, after stronger cloud performance and guidance suggested heavy artificial intelligence spending is starting to translate into returns; it also forecast Azure growth of around 45% in constant currency for its fiscal first quarter. At the same time, the 30-year US Treasury yield neared 5.24%, its highest level since 2007, underscoring a bond market focused on inflation persistence, elevated capital demand and higher term premia even as equity pricing leans on productivity-driven earnings resilience.
Mixed Policy Signals and Economic Data
Policy and data offered mixed cues. The Federal Reserve on July 29 held the federal funds target range at 3.50%–3.75% in a 9–3 vote, with three officials favouring a 25-basis-point rise, while reiterating its 2% inflation objective. June PCE fell 0.1% month on month and core PCE rose 0.1%; year on year, headline PCE slowed to 3.7% and core to 3.3%. GDP growth eased to 1.5% annualised in the second quarter from 2.1%, yet real final sales to private domestic purchasers accelerated to 3.9% from 1.7%, complicating expectations for rate cuts as long-dated yields reset the cost of capital.
