US Stocks Surge as Nasdaq Composite Index Gains Over 600 Points; Microsoft and SanDisk Jump After Results

TradingKey - Cooling U.S. inflation in June weakened Federal Reserve rate hike expectations, and Microsoft's earnings proved that AI is poised to generate sustainable revenue, reversing the market's previous sluggish sentiment; the three major U.S. stock indexes rose across the board, with memory stocks leading the gains and software stocks pulling back.

At the close, the Dow Jones Industrial Average rose 1.19% to 52,208.06 points; the Nasdaq Composite Index rose 2.78% to 25,122.18 points; the S&P 500 Index rose 1.66% to 7,437.63 points.

Tech Stock Performance

Microsoft (MSFT) surged 15.51% post-earnings, trading at $451.

In the fourth fiscal quarter, Microsoft's total revenue increased 18% year-over-year, and EPS rose 23%, beating analyst estimates by more than 10%; full-year Azure revenue surpassed $100 billion for the first time; commercial cloud remaining performance obligations (RPO) grew 84% year-over-year to $678 billion, approximately twice its annual revenue; during the quarter, its investment in Anthropic generated $3.2 billion in revenue, and Microsoft 365 Copilot paid users surpassed 30 million.

Among mega-cap tech stocks, Microsoft (MSFT) rose 15.51%, Broadcom (AVGO) rose 4.73%, Amazon (AMZN) rose 3.90%, Tesla (TSLA) rose 3.53%, and Nvidia (NVDA) rose 2.65%; on the downside, Meta Platforms (META) fell 7.95%, Apple (AAPL) fell 1.41%, Google (GOOGL) fell 0.91%, and SpaceX (SPCX) fell 0.31%.

[Source: FutuBull]

The Philadelphia Semiconductor Index rose 8.19% to close at 11,302.99 points. Among its 30 constituents, 29 rose and 1 fell.

Among memory stocks, SanDisk (SNDK) rose 25.99%, Micron Technology (MU) rose 18.36%, SK Hynix (SKHY) rose 17.52%, Western Digital (WDC) rose 15.37%, and Seagate Technology (STX) rose 11.41%.

Among optical communication stocks, Astera Labs (ALAB) rose 20.00%, Lumentum (LITE) rose 15.09%, Credo Technology (CRDO) rose 13.32%, Ciena (CIEN) rose 12.54%, and Marvell Technology (MRVL) rose 12.18%.

Company News

Google DeepMind Launches Gemini Robotics 2 Robot AI Model

Google DeepMind has launched the Gemini Robotics 2 model. According to the introduction, Gemini Robotics 2 enables robots to reason about every action, thereby unlocking a wide range of tasks. For example, it can enable a humanoid robot to walk, squat, stretch, and manipulate objects to clean up a cluttered room. It can even collaborate with other robots to complete jobs faster. This deep intelligence can also run locally on devices while seamlessly adapting to a completely new robot body in just a few hours. Meanwhile, Google DeepMind also released two other robot AI models—Gemini Robotics ER 2 and On-Device 2. Gemini Robotics ER 2 is the most powerful embodied reasoning (ER) model, a vision-language model (VLM) that will enable robots to communicate with humans, understand the physical world, and plan multi-step tasks lasting several minutes. On-Device 2 is the most efficient vision-language-action (VLA) model, optimized to run locally on robotic devices. This model can now quickly adapt to an entirely new robotic entity using just a few hours of data.

Oracle and Google Expand Collaboration to Bring Gemini to Enterprise Applications

Oracle and Google said on Thursday that they will expand their collaboration to bring Google's Gemini models into Oracle's enterprise application portfolio. The two companies said Thursday that the partnership builds on customers' existing access to Gemini models via Oracle Cloud Infrastructure's enterprise AI platform. These models will go live in Oracle Fusion Applications' AI Agent Studio. The development platform allows enterprises to build, connect, execute, and run AI automation and agentic applications using reusable Oracle, partner, and external agents.

OpenAI Announces Price Cuts for Two GPT-5.6 Models

OpenAI said on Thursday that it will cut the prices of two GPT-5.6 models after improving the efficiency of the systems supporting them. OpenAI announced that it will reduce the price of GPT-5.6 Luna by 80% and GPT-5.6 Terra by 20%. Luna will now cost $0.20 per million input tokens and $1.20 per million output tokens, while Terra will be priced at $2.00 per million input tokens and $12.00 per million output tokens. OpenAI stated that the price cuts for Luna and Terra have already been reflected in the billing rules for Codex and ChatGPT Work; however, the most powerful version, GPT-5.6 Sol, will not see a price reduction. OpenAI also noted that it will offer a faster option for GPT-5.6 Sol in the API. Recently, OpenAI has been in fierce competition with companies like Anthropic to provide the best model. As next-generation reasoning models consume a significantly larger number of tokens in longer-running agentic tasks, both OpenAI and Anthropic have adjusted their pricing, rate limits, and other usage policies.

TSMC Develops New Chip Packaging Technology to Counter Competition from Intel

TSMC (TSM) is developing an advanced chip packaging technology similar to Intel's (INTC) existing technology, according to two people with direct knowledge of the project, as reported by The Information. In the past, packaging was viewed as a relatively routine step in semiconductor manufacturing. However, with the surge in AI demand, chip designers need to integrate more processors and high-bandwidth memory into increasingly massive and complex packages, making advanced packaging one of the industry's most critical bottlenecks. Intel developed a packaging technology called Embedded Multi-Die Interconnect Bridge (EMIB). The technology uses small silicon bridges to establish high-speed connections between processors and memory. Because it supports larger-scale multi-chip designs to create more powerful AI chips and helps chip designers diversify their supply chains, it has attracted attention from potential customers such as Nvidia (NVDA.O). Sources said that within TSMC, engineers refer to this advanced packaging project as "EMIB-like" and have already discussed the plan with some customers.

Banks in Talks for $15 Billion Loan for Anthropic Data Center

A data center developer partnering with Anthropic is in advanced talks to borrow $15 billion to build a massive data center campus and power plant in Texas, with Google providing financial guarantees and chips, according to people familiar with the matter reported by The Wall Street Journal. Under the deal being negotiated, a syndicate of banks led by Morgan Stanley would provide a $15 billion loan to Nexus Data Centers to construct the campus in Hubbard, Texas. The campus will feature its own natural gas power plant capable of generating 1.6 gigawatts of electricity. The deal could be announced as early as today. To help Nexus raise the debt financing, Google has guaranteed Anthropic's billions of dollars in lease and power payment obligations to protect against a default by the startup, the people said. However, one of the people noted that Google's backing is limited, covering only the minimum amount required for the banks to close the financing. The guarantees cover four data center leases signed by Anthropic, along with corresponding power purchase agreements, with power supplied by an on-site captive power plant serving the campus.

Industry & Macro News

Korea Exchange Reportedly Considering Temporary Short-Selling Ban; Source Clarifies It Is Currently Only an Exploratory Process

According to media reports, the Korea Exchange has begun examining the feasibility of implementing a "temporary short-selling ban" and "narrowing daily price limits" as one of its high-intensity measures to address a stock market crash. Previous reports indicated that the Korea Exchange held an internal discussion on the afternoon of the 29th regarding the feasibility of a temporary short-selling ban and the time required for system implementation. Citing a source familiar with the matter, Yonhap's Infomax reported: "Currently, only the technical feasibility has been confirmed." However, the source emphasized: "This is merely an exploration during the process of identifying available tools to mitigate stock market volatility, and is not predicated on actual implementation."

Bank of England Votes 6-3 to Keep Interest Rates Unchanged

The Bank of England kept its benchmark interest rate unchanged at 3.75%, with the MPC voting 6-3 to hold rates versus raising them (compared to 7-2 at the last meeting). Bank of England Monetary Policy Committee (MPC) members Greene, Mann, and Chief Economist Pill supported a rate hike. At the June meeting, only Pill and Greene supported immediate action. The committee maintained its forward guidance, stating it is "prepared to act as necessary" to prevent persistent high inflation while managing the impact of recent volatile energy prices. However, the committee noted "clear signs" that domestic inflationary pressures are easing, with "little evidence" currently that energy shocks have pushed up wage demands or further passed through to other goods and services prices. The majority of members supporting the hold also noted that their policy stance could change if the war ends soon, with two members indicating they would consider a rate cut under such circumstances.

Citi: Warsh's Focus on Broader Inflation Metrics May Reduce Likelihood of Near-Term Rate Hike

Citigroup economists Andrew Hollenhorst and Veronica Clark stated that Federal Reserve Chairman Warsh's hints that inflation measures other than the Personal Consumption Expenditures (PCE) price index will play a larger role in monetary policy have reduced the likelihood of a near-term Fed rate hike. Core PCE inflation fell to 3.3% in June from 3.4%. By comparison, the core Consumer Price Index (CPI) stood at 2.6%, closer to the Fed's 2% inflation target. Hollenhorst and Clark said: "Over the coming months, it should become increasingly clear to markets that the broader inflation measures Warsh is focusing on do not show a concerning acceleration of inflation." The market currently prices in a 59% probability of a Fed rate hike in September. However, the two economists believe this market expectation may be wrong.

USD/JPY Once Plunged Over 400 Pips

The USD/JPY surged over 3% intraday, marking its largest gain since the Japanese government's market intervention earlier this year, amid speculation that Japanese authorities may step in again to support the yen. Previously, the yen had been weakening steadily, at one point falling to its lowest level in nearly 40 years. Although the Japanese government conducted a record 11.73 trillion yen (approximately $73.2 billion) of foreign exchange interventions between April 28 and May 27 to prevent the USD/JPY from breaking above the 160 level, the yen has remained under pressure. According to foreign reserve data released by Japan's Ministry of Finance, the funds required for the Japanese government's recent currency interventions likely came from the sale of its foreign securities holdings, including U.S. Treasuries.

US June PCE Price Index Falls 0.1% Month-on-Month

Data released by the U.S. government on Thursday showed that the U.S. PCE price index fell 0.1% month-on-month in June, marking the first monthly decline since the outbreak of the pandemic in 2020, and further explaining why the Federal Reserve chose to hold interest rates steady this week. The annual rate of PCE inflation slowed to 3.7% from May's three-year high of 4.1%. However, it remains unclear whether inflation will continue to recede. The cooling of inflation in June was mainly driven by falling oil prices after a fragile temporary ceasefire agreement was reached between the U.S. and Iran. The core PCE price index rose 0.1% month-on-month in June, lower than market expectations, while its year-on-year growth rate slowed to 3.3% from 3.4%. The Federal Reserve considers the PCE price index, especially the core PCE, the most accurate gauge of U.S. inflation trends. Currently, the indicator shows that U.S. inflation has exceeded the Fed's 2% target for the sixth consecutive year.