Stocks rose as Microsoft's cloud surge lifted tech: Thursday recap

U.S. stocks rallied Thursday. Technology shares drove the major benchmarks higher, one day after the Federal Reserve left interest rates unchanged. The S&P 500 finished at 7,437.63, a gain of 1.68%. The Dow Jones Industrial Average rose 1.18% to 52,208.06. The Nasdaq-100 jumped 3.30%, its best session in weeks, clawing back a pullback that had briefly pushed the tech gauge into correction territory earlier in the week.

The move was lopsided. Technology (XLK) surged 5.50%, by far the strongest group and the engine behind the day’s index gains. The rest of the market looked far more mixed. Industrials (XLI) rose 0.98% and financials (XLF) and energy (XLE) each added about half a percent, while communication services (XLC) fell 2.68%, the weakest sector, and consumer staples (XLP) dropped 2.16%. Health care, real estate, and utilities also slipped. Six of the eleven sectors finished lower even as the headline indexes climbed, a reminder of how narrow the buying was.

The weekly gap is just as stark. The Nasdaq-100 is still down 1.22% across the past five sessions despite Thursday’s jump, while the S&P 500 has edged up 0.48% and the Dow has gained 1.02%. In other words, one strong afternoon repaired much, though not all, of a shaky week for the largest technology names.

The single biggest driver was Microsoft. After Wednesday’s close, the company reported that fiscal fourth-quarter revenue rose 18% to about $90 billion, and that Azure cloud revenue grew 43% from a year earlier, its fastest pace since 2022, topping $100 billion in annual sales. The stock posted one of its largest one-day advances on record and added hundreds of billions in market value, pulling the broader technology complex up with it. The rally also carried a note of relief after the prior day’s Fed decision: policymakers held the federal funds rate at 3.50% to 3.75% in a divided 9-3 vote, with three regional presidents dissenting.

Not every megacap cooperated. Meta Platforms slid after its own results. Revenue rose 28% to $60.8 billion, but earnings came in light and free cash flow collapsed as the company lifted its capital-spending plans for artificial intelligence. That decline helped drag communication services to the bottom of the sector table, a counterweight to Microsoft’s lift.

Breadth was better than the sector split alone suggests. The Russell 2000 tracking fund gained 1.39%, roughly in line with large caps though a step behind the Nasdaq, so the advance was not purely a megacap affair. Volatility fell hard. The Cboe Volatility Index dropped to 17.09, a sign that the anxiety of the prior sessions eased quickly once the Fed meeting and the marquee earnings were out of the way. The 10-year Treasury yield stood at 4.61%.

The calendar stays busy. More large-cap earnings are due after Thursday’s close, and monthly labor-market data arrives next week, with the Fed not scheduled to meet again until September. For now, a single earnings report did most of the work, and the split beneath the surface shows how much of Thursday’s tape rode on one name.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.