US Stock Trend (July 31): Microsoft Surges 15% in Single Day, Marking Largest Gain in 18 Years; Storage Stocks Stage Major Rebound

By: Chaoxiang Research

The market, which was filled with wails yesterday, completely turned around overnight. The U.S. June PCE price index fell year-on-year to 3.7%, inflation data continued to cool, coupled with Microsoft's pre-market earnings report delivering the fastest cloud growth in four years; these two messages together ignited Thursday's opening.

Microsoft's stock price surged over 15% in a single day, creating the largest single-day gain since 2008, with market capitalization increasing by $450 billion in one day, refreshing the historical record for single-day market cap increase. Storage chip stocks followed in a collective carnival; Kioxia surged nearly 32%, SanDisk rose about 26%, Micron rose over 18%, and the Philadelphia Semiconductor Index rose over 8%, ending five consecutive days of decline in one fell swoop.

However, in the same report, the preliminary Q2 GDP value had an annualized growth rate of only 1.5%, far lower than the market expectation of 2.1%. After hours, Apple and Amazon also handed in their respective report cards.

$450 Billion More in One Day, New Record for U.S. Stock Market Cap Increase

The Nasdaq rose 2.78%, the S&P 500 rose 1.66%, the Dow Jones rose 1.19%, and the three major indices rose collectively.

Microsoft was the undisputed protagonist, with stock price surging over 15% in a single day, creating the largest single-day gain since October 2008, and market cap increasing by $450 billion in one day; this increase itself set a historical record for the U.S. stock market. Financial reports show that the company's cloud business revenue growth rate exceeded 40%, the fastest in four years, capital expenditure was also lower than market expectations, and both revenue and output matched accounts.

The Philadelphia Semiconductor Index rose over 8%, ending the previous five consecutive trading days of decline. Storage concept stocks rioted across the board; the Roundhill Storage ETF surged 16.7% in a single day, Kioxia ADR rose nearly 32%, SanDisk rose about 26%, Micron Technology rose over 18%, SK Hynix rose over 17%, and both Lumentum and Western Digital rose over 15%.

The Livermore China Concept Stock Leader Index closed up 3.02%, most major European stock indices closed up, and the German DAX30 rose 0.45%.

WTI crude oil settlement price fell 1.03%, reported at $83.59/barrel. Brent crude oil settlement price fell 1.88%, reported at $89.03/barrel. COMEX gold rose 1.68%, reported at $4166/ounce. COMEX silver rose 2.12%, reported at $59.32/ounce.

Bitcoin opened at $63902.90, flat compared to the previous day, and once rose to $64838.92 in early trading; Ethereum opened at $1908.34, fell 0.6%, and rose to $1923.23 in early trading.

PCE Inflation Continues to Cool, But GDP Growth Slows Significantly

The U.S. June PCE price index rose 3.7% year-on-year, a significant decline from May's 4.1%, and also fell 0.1% month-on-month; calculating this, it is the first time in over six years that negative month-on-month growth has appeared. Core PCE excluding food and energy was 3.3% year-on-year, in line with market expectations, and rose only 0.1% month-on-month, lower than the expected 0.2%. This inflation indicator, valued most by the Federal Reserve, served as a reassurance to the market.

In the same report, the preliminary annualized growth of actual Q2 GDP was only 1.5%, far lower than the market expectation of 2.1%, and the personal savings rate also fell to 2.7%, the lowest level since June 2007. Cooling inflation should have been good news, but viewing slowing growth and bottoming savings rates together suggests that the confidence behind resident consumption may be thinning.

After the data was released, gold spiked briefly then fell back, the U.S. Dollar Index bottomed out then rebounded, and the three major stock index futures were all moving upward; the market seems more willing to interpret this "mixed" report card as a reason that the Federal Reserve does not need to continue being hawkish.

Apple and Amazon Revealed After Hours, Amazon Capital Expenditure Raised Again

Apple's Q3 revenue was $109.42 billion, up 16% year-on-year, exceeding the market expectation of $108.85 billion; earnings per share were $2.02, up 29% year-on-year, also exceeding expectations. However, the company's Q4 revenue guidance is growth of 9% to 11%, lower than the market expectation of 12.1%; this relatively conservative outlook made the after-hours stock price reaction somewhat flat.

The story on Amazon's side is more interesting; Q2 net sales were $200.6 billion, up 20% year-on-year, exceeding the expected $197.01 billion; AWS cloud business revenue grew 37% year-on-year, the fastest growth since 2021, with order backlog reaching $496 billion. The company simultaneously raised the full-year capital expenditure expectation from $200 billion to $220 billion; CEO Jassy stated that the investment boom in the short term is hard to slow down, and AI demand is expected to remain very significant by 2028. This financial report caused Amazon's stock price to surge nearly 10% after hours.

Meta Increases Spending by Nearly $700 Billion, AI Infrastructure Ecosystem Continues to Expand

Meta also disclosed on the same day that it has committed nearly $700 billion in future spending through long-term and short-term agreements, mainly directed towards AI data centers and cloud computing fields. There is also news in the market that a data center developer cooperating with Anthropic is planning a $15 billion financing, preparing to build large data centers and supporting power plants in Texas, and Google will provide financial guarantees and chip support for this transaction.

Selling Pressure Dissipated Faster Than Imagined, AI Narrative Withstood the Test

Yesterday the market was still gloomy over storage stocks falling for five consecutive days and the Nasdaq falling into the correction range; today, one Microsoft financial report completely reversed all pessimistic sentiment. This extreme intraday contrast precisely illustrates that the selling pressure accumulated over these past few weeks was more of a position and sentiment level issue; the AI main thread itself actually didn't develop any cracks. As long as one giant can produce convincing growth evidence, funds will surge back without hesitation.

Amazon raised capital expenditure to $220 billion, plus Meta's nearly $700 billion spending commitment, indicating that major giants have not only not converged AI investment, but are instead increasing it.

This goes exactly against the "return on investment" anxiety repeatedly discussed in the market these past few days; on the books, money is indeed being spent more and more, but as long as solid numbers like cloud business and order backlog can keep up, the market currently seems willing to pay for it.

What truly needs close watching is the divergent signals behind this set of PCE and GDP data; cooling inflation gave the Federal Reserve breathing room, but slowing economic growth and bottoming savings rates indicate that the consumption engine itself may be decelerating. If subsequent data confirms that this slowdown has become a trend, not just a one-time fluctuation, whether today's round of rebound driven by tech giants can withstand the drag from the macro aspect will be the question the market needs to answer next week.