July 30th Market Overview

Happy Thursday

Stocks got back most of what Wednesday took, and Microsoft did most the work.
 
Its cloud business grew at its fastest pace in four years while the company spent $41 billion in a single quarter, giving the AI trade more validity and win .

Chips got a second push from a weird place, a hedge fund forced to sell its entire portfolio, which clears out the biggest seller the group had hanging over it.

Let’s dig in...

Today's Big Picture

Microsoft made the case for AI spending

Microsoft added about $484 billion in market value today, the biggest one-day gain any US company has ever posted. The old record was Nvidia's $440 billion in April 2025. Azure revenue passed $100 billion for the fiscal year and grew at its fastest pace in four years, even with quarterly capital spending at $41 billion. Investors will fund the buildout when the revenue shows up.

The most crowded AI trade got unwound

Situational Awareness, the $24 billion fund run by Leopold Aschenbrenner, sold its entire public stock book to Ken Griffin's Citadel after heavy losses. The fund was long AI hardware and short software, and both sides went against it at once. It had been up more than fourfold this year through June. Forced selling looks ugly while it happens, and JPMorgan told clients this one is now largely finished.

Bonds didn't get the memo

The 30-year Treasury yield sat near 5.24, its highest since 2007, while stocks rallied. Three Fed voters wanted a rate hike this week and didn't get one. Traders are less worried about growth here than about how long inflation sticks around, and that always shows up in long bonds first.

Market Overview

Index Performance

Stock Spotlight

Intercontinental Exchange $ICE ( ▲ 1.25% )  
agreed to buy MarketAxess $MKTX for $167 a share in cash, about a third above Wednesday's close. ICE gets an electronic bond-trading network used by roughly 2,100 institutions.

Micron Technology $MU ( ▲ 18.79% )  
led memory names back after a month that took a serious bite out of the stock. JPMorgan says big funds have finished cutting the borrowed money behind their chip positions, which removes a steady seller.

SK Hynix $SKHY ( ▲ 17.76% )  
picked up a Buy rating from UBS with a $204 target, against Wednesday's close near $127. Analyst Nicolas Gaudois expects AI memory demand to keep climbing through 2027.

Big Name Updates

Meta Platforms $META ( ▼ 8.48% )  
earned $6.18 a share, about a dollar short of estimates, and guided next quarter below what analysts wanted. Capital spending is headed toward $137.5 billion this year and free cash flow has nearly disappeared.

Shell $SHEL ( ▲ 2.26% )  
reported $9.84 billion in adjusted earnings, its best quarter since 2022. Its refineries ran above rated capacity to capture the gap between crude and jet fuel.

Other Notable Company News

Jersey Mike's $JMKE ( ▼ 5.7% )  
opened at $21 after pricing at $23, raising about $1 billion. Blackstone keeps voting control of the (delicious) sandwich chain.

Norwegian Cruise Line $NCLH ( ▼ 9.25% )  
beat estimates and cut its outlook anyway. CEO John Chidsey said the problems are self-inflicted rather than the economy, which is the kind of honesty you want early in a turnaround.

Teladoc Health $TDOC ( ▼ 28.38% )  
cut its full-year forecast after revenue at BetterHelp fell to $212.6 million. The company pushed users toward insurance-covered therapy faster than it could hire therapists to see them.

Yum Brands $YUM ( ▲ 3.4% )  
earned an adjusted $1.62 a share, ahead of estimates. Taco Bell is running $1 Mexican Pizzas to win customers back after the lettuce illness outbreak.

Stellantis $STLA ( ▼ 2.41% )  
posted first-half revenue of 81.61 billion euros and left full-year guidance unchanged. Its European business lost money as Chinese carmakers took share from Fiat and Peugeot on price.

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Sector Watch

Bond market

Mortgage rates hit a one-year high this week, with the average 30-year loan at 6.66.

Two things to keep an eye on:

• The Bank of Japan decides overnight, and Japanese yields tug on ours.

• Friday brings the employment cost index, the cleanest read on wage growth we get all quarter.

Policy watch

Fed

The Fed held rates Wednesday. Three voting members wanted a hike instead, and today's data explains the split.

• Growth slowed to a 1.5 annual rate last quarter, down from 2.1 and below forecasts.

• The Fed's preferred inflation gauge cooled to 3.7 from 4.1, with the core reading at 3.3.

• Consumer spending rose 3.2, and that is the number holding this economy together.

Barclays called it a tough statement undone by a soft press conference. Fidelity's Salman Ahmed now expects the first hike in December.

Fiscal and trade

• The Securities and Exchange Commission will hold a public meeting September 17 on trading stocks 23 hours a day, five days a week.

• Chair Paul Atkins says the exchanges expect to be ready by year end.

International

The Bank of England held at 3.75 in a six-to-three vote, with UK inflation at a 15-month low. Euro zone growth beat expectations and reversed the first quarter's contraction.

The yen had its best day against the dollar since December 2022 on speculation that Japanese officials stepped in. Nobody has confirmed it.

US forces struck a dozen Iranian targets overnight, and Egypt said a drone hit two ships at its Damietta port. Oil finished lower anyway, which tells you how much war premium is already in the price.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

Apple earnings, after the close

Apple $AAPL is expected to earn $1.89 a share on $108.8 billion in revenue. Watch product margins against rising memory costs, and any hint about John Ternus taking over in September.

Amazon earnings, after the close

Amazon $AMZN is the last big cloud read of the week. Analysts see roughly $200 billion in capital spending this calendar year, and free cash flow was negative last quarter.

Bank of Japan, overnight

The rate should stay at one percent. After today's move in the yen, the guidance matters more than the decision.

- John

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