Nasdaq Jumps Nearly 3% as Microsoft’s Earnings Spark a Market Rebound
If your 401(k) or brokerage account looked rough on Wednesday, Thursday brought some relief. Stocks staged a sharp comeback, led by one company’s earnings report that changed the mood on Wall Street almost overnight.
What happened
The Dow Jones Industrial Average rose about 1.1%, the S&P 500 climbed 1.5%, and the Nasdaq Composite led the way with a 2.9% jump, clawing back much of Wednesday’s steep losses. Microsoft was the single biggest driver, surging after posting 43% growth in its cloud computing revenue, the fastest pace since 2022.
That one earnings report rippled across the entire tech sector. A rebound in major chipmakers helped lift the broader market, with a gauge of semiconductor stocks rallying 8% and the Nasdaq 100 climbing 3.2% just a day after entering a technical correction (a drop of at least 10% from a recent high, a common warning sign for tech-heavy portfolios).
Not every company shared in the good news. A disappointing forecast from Meta Platforms weighed on sentiment even as the rest of the sector rallied, a reminder that this earnings season is rewarding companies that can show their artificial intelligence spending is actually paying off, not just companies spending heavily on it.
What this means for your portfolio
Two more major tech earnings reports were due out after Thursday’s closing bell: Amazon faced scrutiny over its cloud business and capital spending, while Apple’s results were watched closely for how rising memory chip prices are affecting its profit margins. If you hold index funds or individual tech stocks, expect continued volatility through the end of this earnings cycle as investors sort winners from spenders.
The broader backdrop is worth understanding too. This week’s rebound followed a rough Wednesday, when stocks sold off after the Federal Reserve held interest rates steady and left investors uncertain about its next move.
Bond markets have also been under pressure, with the 30-year Treasury yield climbing to its highest level in decades even as short-term Fed policy stayed unchanged. Higher long-term yields tend to weigh more heavily on growth and tech stocks specifically, which is part of why this sector’s swings have been sharper than the market as a whole.
If you’re newer to investing and these daily swings feel unsettling, that’s normal, and it’s worth understanding the mechanics before reacting. Our guide on how to start investing walks through the basics, and Warren Buffett’s approach to market drops, covered in our piece on his stock crash rule, is a useful frame for days like Wednesday’s selloff.
For more on why chip and AI-related stocks have been swinging so hard lately, our coverage of Nvidia’s AI outlook bullish stance digs into the demand story behind the volatility.
