Key Takeaways
- Wall Street's major indexes surged to fresh record highs, propelled by a Federal Reserve interest rate cut and a significant $5 billion investment by Nvidia (NVDA) in Intel (INTC), which sent Intel shares soaring over 23%.
- FedEx (FDX) delivered a strong first-quarter performance, handily beating analyst expectations with adjusted earnings per share of $3.83 and revenue of $22.2 billion.
- U.S. long-term capital inflows saw a notable decrease in July, with net long-term Treasury International Capital (TIC) flows at $49.2 billion, down from $150.8 billion last year, although overall foreign holdings of U.S. Treasuries reached a record high of $8.339 trillion.
- Former President Trump announced efforts to regain control of Afghanistan’s Bagram Air Base, emphasizing its strategic importance due to its proximity to China's nuclear facilities and criticizing the 2021 U.S. withdrawal.
- Microsoft (MSFT) significantly expanded its investment in Wisconsin, committing an additional $4 billion for a second AI data center, bringing its total spending in the state to over $7 billion.
Wall Street rallied to new record highs on Thursday, driven by the Federal Reserve's decision to implement a quarter-point interest rate cut, with indications of further reductions in upcoming policy meetings. The S&P 500, Nasdaq, and small-cap Russell 2000 index all reached unprecedented levels, as investors embraced a risk-on sentiment fueled by expectations of a lower interest-rate environment. Technology stocks were at the forefront of the gains, notably boosted by Nvidia's (NVDA) announcement of a $5 billion investment in chipmaker Intel (INTC), which sent Intel shares skyrocketing by 23.1% to 24.6% in their biggest daily gain since 1987. Despite the market euphoria, analysts cautioned about high valuations and the market's increasing reliance on Big Tech companies.
In corporate news, FedEx (FDX) reported a robust first quarter for fiscal year 2025, surpassing analyst estimates across key metrics. The logistics giant posted adjusted earnings per share of $3.83, exceeding the estimated $3.59, on revenue of $22.2 billion, which also beat predictions of $21.67 billion. The company's adjusted operating income reached $1.30 billion, higher than the expected $1.21 billion, signaling a strong start to the fiscal year.
Meanwhile, U.S. Treasury International Capital (TIC) data for July revealed a significant decline in net long-term capital inflows, totaling $49.2 billion, a sharp drop from $150.8 billion recorded in the same period last year. Total net TIC flows for the month stood at $2.1 billion, down from $77.8 billion previously. Despite this monthly dip in new purchases, overseas investors increased their overall holdings of U.S. Treasuries to a record high of $8.339 trillion in July, up from $8.211 trillion in June. Japan maintained its position as the largest foreign holder, while China reduced its holdings.
In geopolitical developments, former President Donald Trump stated that the U.S. is actively working to regain control of Afghanistan’s Bagram Air Base from the Taliban. Trump underscored the base's critical strategic value, particularly its proximity to China's nuclear facilities, which he claimed are "an hour away." He also reiterated his criticism of the Biden administration's 2021 withdrawal from Afghanistan, labeling it a "total disaster" that surrendered a vital asset. Afghan authorities, however, have denied claims that China controls the base.
Elsewhere in technology, Microsoft (MSFT) announced a substantial expansion of its data center investments in Wisconsin, committing an additional $4 billion to build a second artificial intelligence data center in Racine County. This new commitment brings Microsoft's total investment in the state to over $7 billion, with plans for the expanded campus to eventually house the world's most powerful AI supercomputer, utilizing hundreds of thousands of Nvidia (NVDA) GPUs.
In media and politics, House Democrats called for the resignation of Federal Communications Commission (FCC) Chair Brendan Carr, accusing him of "corrupt abuse of power." The demand followed allegations that Carr pressured Walt Disney Co.'s (DIS) ABC network to indefinitely suspend Jimmy Kimmel's late-night show after the host made controversial comments. Democrats claim Carr threatened regulatory action against ABC and Disney, which holds FCC licenses.
Finally, the Associated Press (AP) is reportedly ahead of schedule on its $100 million fundraising goal for the AP Fund for Journalism, an initiative dedicated to supporting local news reporting.
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.