Key Takeaways
- Microsoft (MSFT) shares jumped 12%, their largest one-day gain since 2020, after reporting fiscal Q4 revenue of $90 billion and record Azure cloud growth of 43%.
- US Core PCE inflation cooled to 0.13% month-over-month in June, the mildest gain since early 2025, bringing the 12-month rate to 3.3% and easing pressure on the Federal Reserve.
- NATO and Poland activated air defenses after a Russian Kh-101 cruise missile violated Polish airspace and crashed near the village of Tarnawa-Kolonia; no casualties were reported.
- Spot Gold surged 1% to a record $4,103.67/oz as geopolitical tensions in Eastern Europe and the Middle East drove a flight to safety.
- The Japanese Yen surged nearly 1.5% against the dollar, sparking intense speculation of a direct market intervention by the Ministry of Finance to defend the currency.
Microsoft and AI Optimism Drive Market Rebound
Wall Street indices opened sharply higher on Thursday, led by a massive rally in technology shares. The S&P 500 rose 0.92% to 7,383.21, while the Nasdaq climbed 1.54% to 24,818.38 in early trading.
The primary catalyst was Microsoft (MSFT), which quelled fears about AI monetization by reporting that Azure revenue crossed $100 billion for the full fiscal year. While Meta Platforms (META) saw its price target cut to $830 by HSBC due to rising capex concerns, the broader market focused on Microsoft's ability to translate AI investment into commercial returns, with over 30 million paid Copilot seats now active.
Geopolitical Tensions Escalate in Poland
Security concerns dominated European headlines as NATO confirmed a Russian Kh-101 missile entered Polish territory during a massive overnight strike on Ukraine. Polish Prime Minister Donald Tusk stated that while the missile landed in an uninhabited area, the incident demonstrates Russia’s "recklessness and willingness to escalate."
In response, NATO scrambled Polish F-16s and surveillance aircraft to monitor the situation. This violation of NATO airspace, combined with ongoing conflict in the Middle East, propelled Spot Gold to an all-time high of $4,103.67 per ounce, as investors sought protection against regional instability.
Inflation Data and Fed Outlook
New economic data provided a "realist" path for Federal Reserve Chair Kevin Warsh. The June Core PCE Price Index, the Fed’s preferred inflation gauge, rose just 0.13%, meeting expectations and signaling that price pressures are continuing to ease.
White House Advisor Kevin Hassett noted that the data makes the Fed's job "easier," suggesting that the current restrictive policy is successfully cooling the economy without triggering a recession. However, Q2 GDP grew at an annualized rate of 1.5%, missing the 2.1% forecast, which added to the downward pressure on the US Dollar and fueled the Yen's rapid appreciation.
Energy Markets and Shell Results
Shell (SHEL) reported a strong second-quarter profit of $9.84 billion, driven by its integrated gas and trading divisions. CEO Wael Sawan announced the company is targeting a Final Investment Decision (FID) for LNG Canada Phase 2 by the end of this year.
Despite the strong earnings, WTI Crude fell toward $83/bbl as traders weighed cooling US demand against supply risks. Shell's CFO warned of continued tightness in the LNG market for the coming quarter, noting that more volumes are being redirected from Asia to Europe to meet shifting global demand.
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.