US inflation matches expectations, tech earnings lift stocks

Global financial markets experienced a sharp rebound on Thursday, July 30, as U.S. inflation data matched expectations and strong earnings from Microsoft eased investor anxiety over the sustainability of artificial intelligence investments. The rally followed a period of intense volatility earlier in the week, driven by geopolitical tensions, mixed signals from the Federal Reserve, and a brutal selloff in technology and chipmaker stocks.

The key catalyst for Thursday's recovery was a U.S. Commerce Department report showing the Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, fell 0.1% in June, aligning with forecasts. Annually, inflation held at 3.7%. This data provided some reassurance to markets grappling with uncertainty over the central bank's policy path. Futures on the tech-heavy Nasdaq 100 jumped 1.51%, while S&P 500 and Dow futures also gained.

Earnings from major technology firms played a pivotal role. Microsoft shares surged over 9% in premarket trading after the company projected strong cash flow generation through its 2027 fiscal year, signaling its massive AI investments are beginning to yield returns. In contrast, shares of Meta...