The S&P 500 and Nasdaq Composite rose on July 31, 2025, driven by strong earnings reports from Meta and Microsoft, reflecting renewed investor confidence in AI-driven growth. Meta shares surged 11%, while Microsoft stock increased by 4%, marking a market capitalization exceeding $4 trillion.
Meta was upgraded to a “Buy” rating by HSBC with a price target increased from $610 to $900. KeyBanc upgraded Microsoft to “Overweight” with a new price target of $630 following its fiscal Q4 results. Meanwhile, the U.S. economy rebounded with a GDP growth rate of 3% in Q2, surpassing a forecast of 2.6%.
On the macroeconomic front, the Personal Consumption Expenditures (PCE) index indicated rising inflation rates, prompting the Federal Reserve to keep interest rates unchanged amidst differing opinions within the committee. Rising trade tensions eased with agreements forged, notably a deal with South Korea imposing a 15% tariff on imports, while U.S. exports remain duty-free.
