Nasdaq Index: Can Amazon and Apple Extend Microsoft’s Tech Rebound After Close?

Nasdaq Rallies 2.5% as Microsoft and Weak PCE Collide

The major U.S. stock indexes are recovering Thursday after Wednesday’s Fed-day selloff stretched the Nasdaq toward its 200-day moving average. The semiconductor group is surging off the lows on Microsoft’s earnings, Meta is down sharply after proving the AI spending story does not work for everyone, and core PCE came in at expectations without clearing the rate risk.

At 16:27 GMT, the Nasdaq Composite is up 2.53%, on pace for its best day since June 15. The S&P 500 has gained 1.30%. The Dow is higher by 414.41 points, or 0.80%.

Daily Nasdaq Composite Index Technical Analysis

The Nasdaq Composite Indexis sharply higher at the mid-session after falling to follow through to the downside, following yesterday’s steep plunge. On Wednesday, the tech-heavy index fell sharply to 24425.34, edging near the 200-day moving average and the long-term 50% to 61.8% zone at 23984.24 to 23173.24.

The new short-term range is 26316.81 to 24425.34. Its first upside target is the 50% level at 25371.08. If the upside momentum becomes strong enough to overtake this pivot then look for the rally to possibly extend into the 50-day moving average at 25956.77.

Microsoft Answered the AI Spending Question

Microsoft is up 15% and the reason is straightforward. Azure grew 43% at constant currency, ahead of the 40.2% StreetAccount forecast, and passed $100 billion in revenue for fiscal 2026. Quarterly revenue reached $90.01 billion against the $87.62 billion estimate. Capital expenditures and finance leases hit $41 billion in the fiscal fourth quarter, up 69%, and CFO Amy Hood said spending grows again in fiscal 2027.

The market spent two weeks selling the chip group on the fear that AI spending was outrunning the demand. Microsoft showed it is not. The shorts were positioned for another company failing to justify the capex, and instead they got 43% Azure growth with the CFO saying the buildout accelerates. One report does not settle the AI valuation debate, but it gives the supply chain a reason to stop falling and that is exactly what is happening across the semiconductor names today.

Meta Proves the Market Is Picking Winners

Meta is down 9% and the gap between Thursday’s two biggest earnings stories is the clearest signal in the market. Adjusted earnings missed by $1.04 at $6.18 per share. The third-quarter revenue guide came in at $61 billion to $64 billion with the low end below the $63.15 billion consensus. Free cash flow fell 91% in the second quarter.

The ad business is still producing. That is not saving the stock because the market watched Microsoft demonstrate that heavy spending can coexist with expanding demand on the same night Meta demonstrated the opposite. Microsoft is converting capex into revenue growth. Meta is converting it into a cash flow collapse. The market made that distinction in about ten minutes of after-hours trading Wednesday night.

The split matters for the broader rally. As long as traders treat it as stock selection rather than an indictment of the entire AI buildout, the chip bounce holds. The moment Meta’s result gets applied to every infrastructure name, the shorts come back.

GDP Miss and PCE Data Keep Rate Risk Alive

Second-quarter GDP grew at a 1.5% annual rate, below the 1.8% estimate. The miss came from lower federal spending and inventories. Personal consumption rose 2.1% and final sales to private domestic purchasers increased 3.9%. The consumer did not fall apart. The government pulled back.

June headline PCE fell 0.1% for the month and stood at 3.7% year-over-year. Core PCE rose 0.1% and held at 3.3% annually, matching estimates. That is an improvement from the oil-driven spike earlier in the year, but the three officials who dissented for a hike Wednesday can look at 3.3% core and say nothing in this report changes their mind.

Treasury yields pushed higher after the number. That is the headwind the Nasdaq has to deal with even on a day when Microsoft is carrying the index. Growth stocks bouncing on earnings with yields rising into the move is a trade that needs everything to keep going right. One soft report from tonight’s calendar and the yield pressure takes over.

Stocks in the News

The iShares Semiconductor ETF is surging more than 8%. Micron and AMD have each jumped more than 13%. Lam Research is up more than 18% after its own earnings beat. The chip group is getting its strongest bid in weeks after Microsoft gave shorts a reason to cover and buyers a reason to step back into the AI supply chain.

What to Watch

Amazon, Apple and Coinbase report after the close, and Amazon is the one that matters most for the chip trade. Microsoft proved the AI spending produces revenue. Meta proved it does not always. Amazon sits between those two results, and the market is going to sort the entire semiconductor bounce based on which side Amazon lands on. Apple is a different question entirely because it tests consumer strength outside the AI infrastructure buildout. The Nasdaq cannot sustain a recovery on hyperscaler earnings alone if the consumer side is softening underneath it.

The Nasdaq bounced hard off the area near its 200-day and the first retracement target is directly above. That level is where sellers showed up during the last counter-trend rally, and buyers need to push through it rather than stall there again. Core PCE at 3.3% with three dissents already on the record and yields climbing after the data are working against the growth stocks that are leading today’s move. The earnings have to do enough after the close to overcome a rate picture that has not improved.

More Information in our Economic Calendar.