This update was written automatically with AI from market data and news wire reports, and published without review by a person.
Key Takeaways
- Fed’s Mary Daly warns AI is fueling "price pressures" in semiconductors and data centers, though its direct contribution to current inflation remains modest.
- Microsoft (MSFT) suffers a massive service outage affecting over 130,000 users across Outlook, Teams, and Microsoft 365 in the U.S. and Canada.
- Google (GOOGL) launches Gemini 4 Hydrogen, a major Search upgrade that is reportedly 2.5 times faster than previous models.
- U.S. 30-Year Bond auction "tails" on soft demand, with the high yield landing at 5.441% as investors demand a higher premium.
- Geopolitical tensions escalate as U.S. CENTCOM reportedly advises Israel to prepare for a possible resumption of hostilities with Iran.
Fed’s Daly Highlights AI Inflation Risks
San Francisco Federal Reserve President Mary Daly stated on Thursday that while the economy is being driven by a significant technology boom, there is "no doubt" that AI-fueled demand is creating price pressures. Daly noted that the AI pipeline remains deep and is unlikely to dry up even if the pace of development slows. She emphasized that while AI's direct impact on the labor market and current inflation is currently limited, it poses a long-term risk of contributing more to inflation through sustained supply shocks in the tech sector.
Daly’s comments come as the Federal Reserve continues to monitor a "stuck" inflation rate, which sat at 3.7% year-over-year in recent reports. She indicated that the solid labor market provides the central bank with "room to focus on inflation," suggesting that further interest rate hikes may be necessary to bring prices down to the Fed's 2% target.
Widespread Microsoft Outage Disrupts Business
Microsoft (MSFT) experienced a significant service disruption on Thursday, with Downdetector recording over 130,000 reports of issues with Outlook at its peak. The outage also impacted Microsoft 365, Teams, and the Microsoft Store, leaving thousands of users in the U.S. and Canada unable to send emails or access cloud services. Microsoft confirmed it is investigating issues with Exchange Online mailboxes in the Americas, though some reports suggest connectivity issues may be affecting other global regions.
Google Search Receives "Gemini 4 Hydrogen" Upgrade
Alphabet (GOOGL)'s Google announced a "massive upgrade" to its search engine with the global rollout of Gemini 4 Hydrogen. According to Google, the new model is 2.5 times faster than Gemini 3.8 Flash and offers improved reasoning for complex, multi-part queries. The update aims to provide more visual and intuitive responses, including comparison tables and structured data, marking the largest model improvement to Google Search to date.
Treasury Market: 30-Year Auction Faces Weak Demand
The U.S. Treasury’s sale of $25 billion in 30-year bonds saw lackluster interest on Thursday, resulting in a "tail" where the high yield of 5.441% exceeded the when-issued yield of 5.437%. The bid-to-cover ratio fell to 2.36, down from 2.54 in the previous auction, signaling a cooling appetite for long-term government debt. Indirect bidders, a category that includes foreign central banks, took only 68.1% of the offering, a notable decline from the 72.3% seen in the prior sale.
Global Tensions: Israel and China
In geopolitical developments, U.S. CENTCOM has reportedly alerted the Israeli military to prepare for a potential resumption of war with Iran. This comes amid reports that Iran has added new demands to ongoing negotiations, which U.S. officials described as "overreaching." Simultaneously, the Wall Street Journal reports that Beijing is seeking $15 billion in funds to establish a Chinese rival for insuring world shipping, a move aimed at reducing China's reliance on Western-dominated maritime insurance hubs.
Automated market updates written with AI from market data and news wire reports, published without human review.