Key Takeaways
- Microsoft (MSFT) has surpassed a $4 trillion market capitalization in after-hours trading, joining Nvidia (NVDA) in an exclusive club following strong earnings.
- Meta Platforms (META) shares soared over 9% after reporting an earnings beat and a robust revenue forecast, with CEO Mark Zuckerberg announcing Meta AI now boasts over 1 billion monthly active users.
- The U.S. economy grew at an annualized rate of 1.25% in the first half of the year, a full percentage point below the pace of 2024, indicating a moderation in economic activity.
- The Brazil Central Bank held its benchmark Selic rate unchanged at 15.00%, one of the highest in the world, amidst an "uncertain global scenario" and higher inflation forecasts.
- The ASX is anticipated to fall as global rate cut bets diminish, while Japan's financial industry is tightening oversight of government bond futures trading after Nomura was fined for manipulation.
Global financial markets are navigating a complex landscape marked by significant corporate earnings, evolving macroeconomic data, and central bank decisions. Tech giants Microsoft (MSFT) and Meta Platforms (META) delivered impressive results, while the U.S. economy showed signs of moderating growth. Meanwhile, the Brazil Central Bank maintained a high benchmark interest rate, and concerns over rate cuts and bond market integrity are impacting other regions.
Microsoft (MSFT) achieved a monumental milestone, exceeding a $4 trillion market capitalization in after-hours trading, solidifying its position alongside Nvidia (NVDA) in an elite group of companies. This surge comes on the heels of strong earnings, further underscoring the ongoing investor confidence in the technology sector, particularly in companies driving the AI revolution.
Meta Platforms (META) also experienced a significant boost, with its shares jumping over 9% following an earnings report that surpassed expectations and a strong revenue forecast. CEO Mark Zuckerberg highlighted the remarkable growth of Meta AI, which now boasts over 1 billion monthly active users across its various platforms, signaling the company's deepening commitment to artificial intelligence and its potential for future monetization. CFO Susan Li indicated that the company expects to add talent across all priority areas, driving headcount growth through 2026, with a particular focus on generative AI.
In macroeconomic news, the U.S. economic growth averaged 1.25% in the first half of the year, a full percentage point lower than the pace observed in 2024. This moderation in growth suggests a cooling demand, with consumer spending advancing at a tame 1.4% in the second quarter, marking the slowest consecutive quarters of growth since the pandemic. Despite this, the Federal Reserve opted to keep its benchmark interest rate unchanged, with Chairman Jerome Powell emphasizing the need for more data to assess the impact of tariffs and inflation before considering policy adjustments.
Internationally, the Brazil Central Bank maintained its benchmark Selic rate at a high 15.00%. This decision, which surprised some market analysts who anticipated a pause in rate hikes, was attributed to an "uncertain global scenario" and persistent inflation projections that remain above the bank's target. The high-interest policy aims to curb rising prices but also makes credit more expensive, potentially discouraging consumption and investment.
Meanwhile, the ASX is projected to fall, influenced by Wall Street's swings and a decrease in global rate cut expectations. In Japan, the financial industry is moving to tighten oversight of government bond futures trading. This follows a ¥21.8 million ($143,000) fine imposed on Nomura Holdings for manipulating the market in March 2021 through a practice known as "layering." This incident has led to a temporary suspension of Nomura from government debt auctions and has prompted the firm to enhance its compliance framework.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.