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Written: July 31, 2025, 15:00 U.S. Eastern Time

Tech stocks led Wall Street higher on Thursday as major companies like Microsoft and Meta Platforms delivered impressive earnings, propelling key indexes toward new records. The surge came even as inflation data and tariff uncertainties continued to weigh on the broader economic outlook.

S&P 500 and Nasdaq move toward new records

Stocks opened strong Thursday morning, extending their upward momentum fueled largely by optimism in the technology sector. As of 11:01 a.m. Eastern Time, the S&P 500 rose 0.2%, coming within range of its record high set earlier in the week. The Nasdaq Composite jumped 0.8%, supported by major tech stock gains, while the Dow Jones Industrial Average remained mostly flat.

The rally was primarily driven by earnings from large-cap tech firms, whose performance and future outlook continue to be shaped by advancements in artificial intelligence (AI).

Meta and Microsoft earnings exceed expectations

Meta Platforms, the parent company of Facebook and Instagram, surged by 11.2% after the company significantly beat Wall Street’s second-quarter expectations on both revenue and profit. Meta’s continued investment in AI technologies is seen as a long-term growth strategy that resonated with investors.

Microsoft shares also rose, up 4.4% on the day, following a strong earnings report. Particularly noteworthy was an encouraging update on Azure, Microsoft’s cloud computing division and a key component of its AI ecosystem. The results underscored the company’s leading role in the ongoing AI-driven transformation across sectors.

The tech momentum is expected to continue as Apple and Amazon prepare to release their earnings after the closing bell. These companies, along with Microsoft and Meta, have been the primary drivers behind the market’s recent rally, driven by growing investor confidence in AI’s future.

Strong earnings reported beyond tech

Outside of the technology sector, other major companies also posted solid earnings that helped sustain the market’s overall performance.

CVS Health rose 3.3% after exceeding Wall Street expectations and raising its full-year guidance. The healthcare giant’s strong quarterly results added further depth to a week already packed with corporate earnings reports across sectors.

Earnings remain a primary focus for investors as companies navigate a complicated macroeconomic environment shaped by inflation, interest rates, and trade policy.

Inflation edges higher, raising policy questions

Economic data released Thursday morning showed inflation ticked up slightly in June. According to the U.S. Commerce Department, the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, increased by 2.6% compared to June of last year. That’s up from 2.4% in May and slightly higher than economists’ expectations.

Earlier this month, the Consumer Price Index (CPI) also indicated a rise in inflation, reinforcing concerns that price pressures remain sticky despite the Fed’s ongoing efforts to bring inflation closer to its 2% target.

In addition, weekly jobless claims data showed a small uptick in Americans filing for unemployment benefits. While not alarming on its own, it adds complexity to the Fed’s balancing act between supporting employment and controlling inflation.

Fed maintains interest rates amid economic uncertainty

Amid this backdrop, the Federal Reserve chose to leave its benchmark interest rate unchanged for a fifth consecutive meeting. Officials continue to monitor inflation trends carefully before making any decision on rate cuts.

While lower interest rates could support job growth and boost economic activity, the risk of reigniting inflation remains a central concern. Fed Chair Jerome Powell has reiterated that any decision on rates is made collectively by the Federal Open Market Committee (FOMC), despite political pressure.

President Donald Trump has publicly called for rate cuts to stimulate the economy, but the Fed has opted for caution, especially given the volatile economic signals and ongoing trade policy disruptions.

Trade tensions reemerge with tariff threats

Trade policy uncertainty added another layer of market risk this week. On Wednesday, President Trump signed an executive order imposing 50% tariffs on imports from Brazil, citing political motivations tied to the trial of Brazil’s former president Jair Bolsonaro, a known ally.

Trump has also threatened broader tariffs on goods from multiple countries unless new trade agreements are reached by Friday. Negotiations with China appear to have paused escalations for now, and a tentative deal with South Korea has been announced. However, businesses remain on edge as Trump’s trade decisions continue to defy traditional economic strategy.

Major U.S. companies including Ford and Hershey’s have warned in recent weeks that tariffs are affecting both current and projected earnings.

Rate cut expectations cooling ahead of September

Investor expectations for a Fed rate cut in September are fading. According to data from CME Group, traders now see only a 39.2% probability of a rate cut at the next meeting. That’s down from 58.4% a week ago and 75.4% a month earlier.

The shifting sentiment reflects growing doubts about whether inflation will cool enough in the near term to justify a cut, even as some sectors of the economy show signs of softening.

Bond yields ease amid cautious optimism

In the bond market, yields fell slightly. The 10-year U.S. Treasury yield dropped to 4.34%, down from 4.37% on Wednesday. Meanwhile, the 2-year yield declined to 3.92% from 3.94%.

Lower yields suggest that investors remain cautious about future growth, even as equities rally on strong earnings and AI optimism.

Global markets mixed as U.S. tech leads

Overseas markets were mostly mixed on Thursday. Asian stocks were generally flat, while European markets saw modest gains in response to the U.S. tech surge.

As the week progresses, investors will continue to monitor a steady stream of earnings reports, economic data, and policy signals that could influence the trajectory of the market into the second half of the year.

Source: AP News – Rallies for Microsoft and Meta send Wall Street higher

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Meta Platforms, the parent company of Facebook and Instagram, kicked off 2024 with a strong first quarter, beating Wall Street estimates thanks to a surge in ad revenue — much of it powered by artificial intelligence.

In results released Wednesday, Meta reported $16.64 billion in profit ($6.43 per share), marking a 35% jump from the same period last year. Revenue also rose by 16% to $42.31 billion, topping analysts’ expectations of $41.34 billion, according to FactSet.

The stock responded positively, climbing 4.4% in after-hours trading to $573.20, despite being down about 8% year-to-date.

“We’ve had a strong start to an important year,” said CEO Mark Zuckerberg. “Our community continues to grow, and our business is performing very well.”

Much of Meta’s Q1 success came from its continued improvements in AI-powered advertising tools, which have helped boost performance across its social media platforms.

While some economic concerns still loom — including reduced ad spending from China-based brands like Temu and Shein — analysts believe Meta’s investment in AI could help cushion any future impact.

“If Meta continues enhancing its AI ad tools, it can likely offset any revenue drop from Chinese advertisers,” said Debra Aho Williamson, chief analyst at Sonata Insights.

Meta is doubling down on its AI future. The company recently launched a standalone AI app, called Meta AI, featuring a new “discover” feed that showcases how users are engaging with the technology. Zuckerberg also highlighted progress on AI-powered glasses and noted that Meta AI now boasts nearly 1 billion monthly active users.

To support these ambitions, Meta is boosting its capital expenditure forecast for 2025 to $64–$72 billion, up from the earlier range of $60–$65 billion. The additional investment will focus on data centers and infrastructure to power its growing AI ecosystem.

Despite broader economic uncertainty and ongoing tariff concerns, Meta also provided revenue guidance for the second quarter — a move seen as a positive signal by some analysts.

“The fact that Meta is offering guidance when many companies are staying quiet is a bullish sign,” said Andrew Rocco of Zacks Investment Research.

Meta’s reach continues to expand globally. In March alone, an average of 3.4 billion people used at least one Meta-owned app, up 6% from a year ago.

Source: AP News – Meta’s first quarter earnings, revenue beat Wall Street’s expectations

Tags: Meta Platforms, Meta Earnings, Meta Q1 Earnings, Meta Revenue Growth, Artificial Intelligence, AI Advertising, Digital Advertising, Meta AI, Mark Zuckerberg, Facebook, Instagram, AI Infrastructure, Data Centers, Technology Earnings, Big Tech, Social Media Platforms, AI Investment, Online Advertising, Meta Financial Results, Technology Industry

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Instagram is rolling out a new AI-powered system designed to detect if teens are lying about their age on the platform. This move is part of a broader push by parent company Meta Platforms to enhance safety and privacy for younger users.

For some time, Meta has used AI to assess users’ ages, but this new feature takes a more proactive approach. The company will now actively scan accounts suspected of being teen profiles, even if the user initially entered a false birthdate when signing up.

If Instagram’s AI flags an account as potentially belonging to a teen, it will automatically switch the account to a “teen” status. Teen accounts come with several key restrictions aimed at boosting safety. For instance:

• Privacy by Default: Teen accounts will be private unless changed by the user.
• Message Restrictions: Teens can only receive direct messages from people they follow or are already connected to.
• Content Limits: Content deemed “sensitive” — like videos featuring fights or promoting cosmetic procedures — will be restricted.
• Screen Time Warnings: Teens will receive a reminder if they spend more than 60 minutes on the app. Additionally, Instagram will activate a “sleep mode” from 10 p.m. to 7 a.m., turning off notifications and sending auto-replies to direct messages.

Meta’s AI system looks at various signals to determine whether a user is accurately representing their age. These include the type of content they engage with, their profile details, and the account’s creation date. The company claims that over time, the AI is trained to better recognize patterns that suggest a user’s true age.

This move comes as social media platforms, including Instagram, face growing scrutiny over their impact on young users’ mental health. Many states are attempting to pass age verification laws to ensure that children under 13 aren’t using apps like Instagram, although these laws have encountered legal challenges.

Meta, along with other social media companies, has advocated for app stores to take more responsibility for age verification. Critics argue that platforms like Instagram aren’t doing enough to safeguard children.

In addition to the AI measures, Instagram will now send notifications to parents, offering guidance on how to discuss the importance of accurate age reporting with their teens.

Meta’s new AI-driven initiative signals a deeper commitment to creating a safer, more controlled experience for younger users, especially as public concern about social media’s impact on mental health grows.

Source: AP News – Instagram tries using AI to determine if teens are pretending to be adults

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