Dow Jones jumps 600 points, Nasdaq surges 3% as chip stocks rally on Microsoft results
Benchmark indices on Wall Street recovered most to all of the losses made during Wednesday’s post-Fed policy sell-off as chip stocks snapped a multi-day losing streak. The rally in chip stocks came at the cost of profit booking in software names that outperformed this week.
The Dow Jones gained over 600 points, more than half of the 1,100-point fall on Wednesday. The S&P 500 rose 1.7%, while the Nasdaq Composite rose 2.7%. Both the tech-led indices recovered everything that they lost on Wednesday and a little more. The Nasdaq 100 index, which had slipped into a “technical correction” on Wednesday, surged nearly 3.5%.
Nearly every chip stock, barring Nvidia, saw double-digit gains on Thursday. Nvidia itself rose 2.5%. However, its peers, AMD, Intel, Micron, gained between 11% to 18%, the SK Hynix ADR gained 18%, while shares of Sandisk were up 26% overnight.
The chip stocks were buoyed by results of Microsoft, whose 15% rally on Thursday turned out to be the best single-day gain for the stock since October 2008. The company added nearly $450 billion in market capitalisation on Thursday, making it the most by any stock in a single-day in history, eclipsing Nvidia’s $440 billion addition after US President Donald Trump had announced his first tariff pause back in April 2025.
Software stocks sold-off overnight as a result of the rally in chip names. Shares of Salesforce, Adobe, Accenture, Cognizant, all fell between 4% to 6% on Thursday. The US-listed Infosys ADR also fell over 5% overnight. The Indian entity has rallied 11% so far this week.
The rally on Wall Street brushed aside every piece of macro data that was reported during the day. The second quarter GDP figure stood at 1.5% for the US economy, lower than the estimates of 1.8% and also lower than the 2.1% figure reported during the first quarter.
Additionally, the Personal Consumption Expenditure (PCE) inflation figure, which is also the Federal Reserve’s preferred inflation gauge, rose 3.7% year-on-year in June, in-line with expectations, while the Core PCE also rose 3.3% from last year, also in-line with what economists had projected. However, both figures remained well above the Fed’s 2% target.The market also ignored the fact that bond markets continue to trade at elevated levels with the 10-year yield hovering around the highest since 2025, while the 30-year yield remaining at the highest since 2007.
Exxon, Chevron, AbbVie, Linde Plc will be reporting their results today, along with the consumer sentiment data.