Tech Stocks May Help Lead Early Rebound On Wall Street

(RTTNews) - The major U.S. Index futures are currently pointing to a higher open on Thursday, with stocks likely to regain ground following the sell-off seen late in the previous session.

Technology stocks may help lead an early rebound on Wall Street, as reflected by the 1.6 percent jump by the tech-heavy Nasdaq 100 futures.

Bargain hunting may contribute to initial strength among tech stocks after the Nasdaq plunged to a three-month closing low on Wednesday. The Dow and the S&P 500 also ended the session at their lowest closing levels in well over a month.

Microsoft (MSFT) is likely to help lead the tech rally, with the software giant soaring by 9.2 percent in pre-market trading.

The spike by Microsoft comes after the company reported better than expected quarterly earnings amid strength in its Azure business.

On the other hand, shares of Meta Platforms (META) are plunging by 9.7 percent in pre-market trading after the Facebook parent provided disappointing revenue growth guidance.

"This reporting season has become less about headline results and more about proving that unprecedented AI spending can generate sustainable profitability," said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, "With Apple and Amazon still to report, the market's verdict on the AI investment cycle remains far from settled."

After tumbling early in the session on Wednesday, stocks showed a significant recovery over the course of the afternoon before seeing substantial volatility late in the day.

The Nasdaq and S&P 500 reached positive territory going into the final hour of trading only to nosedive going into the end of the session.

The major averages all finished the day sharply lower, just off their worst levels. The Dow plunged 1,153.18 points or 2.2 percent to 51,594.14, the Nasdaq tumbled 433.97 points or 1.7 percent to 24,442.94 and the S&P 500 slumped 112.63 points or 1.5 percent to 7,316.15.

With the steep losses on the day, the Nasdaq dropped to a three-month closing low, while the Dow and the S&P 500 fell to their lowest closing levels in well over a month.

The late-day sell-off on Wall Street came as treasury yields surged in electronic trading on concerns about the outlook for interest rates even after the Federal Reserve left rates unchanged.

The Fed said it decided to maintain the target range for the federal funds rate at 3.5 to 3.75 percent, keeping rates unchanged for the fifth consecutive meeting.

The vote to leave rates unchanged was not unanimous, however, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan preferring to raise rates by a quarter point.

Stocks came under pressure early in the day amid a substantial rebound by crude oil prices, with U.S. crude oil futures soaring by more than 6 percent after plummeting by 14 percent over the three previous sessions.

Crude oil prices have spiked amid concerns about another re-escalation of the conflict between the U.S. and Iran after attacks were paused for several days.

U.S. Central Command said in a post on X that Iran launched multiple ballistic missiles in an attempted surprise attack on U.S. forces based in the Middle East on Tuesday. The missiles were successfully intercepted.

In a subsequent statement, Centcom said U.S. and Saudi Arabian forces conducted precision strikes in Iraq against Iran-aligned terrorists that the Islamic Revolutionary Guard Corps directed to attack U.S. forces and Saudi energy infrastructure.

U.S. and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours, Centcom said.

In response to the surprise attacks on U.S. forces in Jordan, President Donald Trump told a Fox News reporter the U.S. will be hitting Iran hard, adding, "They're going to get a beating."

Semiconductor stocks saw substantial volatility along with the broader markets before ending the day sharply lower. The Philadelphia Semiconductor Index plummeted by 5.3 percent to its lowest closing level in three months.

Concerns about the outlook for interest rates also led to a sell-off by housing stocks, as reflected by the 4.3 percent nosedive by the Philadelphia Housing Sector Index.

Networking stocks also showed a significant move to the downside on the day, dragging the NYSE Arca Networking Index down by 4 percent to a three-month closing high.

Computer hardware, airline and banking stocks also ended the day notably lower, while oil stocks continued to turn in a strong performance amid the spiked by crude oil prices.

Commodity, Currency Markets

Crude oil futures are sliding $0.62 to $83.84 a barrel after soaring $5.20 to $84.46 a barrel on Wednesday. Meanwhile, after edging down $2.40 to $4,036.30 an ounce in the previous session, gold futures are jumping $38.60 to $4,074.90 an ounce.

On the currency front, the U.S. dollar is trading at 162.78 yen versus the 163.38 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1476 compared to yesterday's $1.1375.

Asia

Asian stocks fell broadly on Thursday, reversing early gains as investors reacted to escalating Middle East tensions, mixed tech earnings and a sell-off in U.S. bond markets amid uncertainty over where U.S. interest rates are headed.

Tech earnings proved to be a mixed bag, with Microsoft posting strong quarterly earnings and Samsung Electronics forecasting strong AI chip demand, while Meta Platforms issued a weaker-than-expected revenue forecast.

Brent crude futures extended gains to surge above $92 a barrel after rallying nearly 8 percent on Wednesday as the United States carried out fresh strikes on Iran, further intensifying a five-month-old war that is spreading beyond its main fronts to embroil more countries across the region.

The latest escalation came after a drone struck a U.S.-owned gas storage tanker at Egypt's Mediterranean port of Damietta and Iran fired missiles targeting U.S troops in Jordan.

Gold fell to around $4,050 an ounce, while the dollar was little changed as focus shifted to the U.S. PCE price data due later in the day that might provide further insights into the inflation outlook and the likely path of interest rates.

China's Shanghai Composite Index dropped 0.6 percent to 3,804.69 as regulators intensified their crackdown on corporate insiders to help restore investor confidence in the country's embattled stock markets.

High-flying semiconductor names led losses on valuation concerns and fears that they may be overinvesting in AI infrastructure and capacity. Hong Kong's Hang Seng Index finished 0.2 percent higher at 25,858.88 after a choppy session.

Japanese markets rose notably after Advantest issued a stronger-than-expected profit outlook.

While shares of the chip-testing equipment maker surged nearly 11 percent, the Nikkei 225 Index climbed 0.7 percent to 61,867.43, snapping a two-day losing streak. The broader Topix Index ended 0.5 percent lower at 3,952.50.

Seoul stocks fell sharply as investors continued to offload tech stocks on rising concerns over artificial intelligence spending and uncertainty over the Fed's future policy path.

The Kospi Index tumbled 1.2 percent to 5,593.56 after volatile trading as the government pledged additional measures to stabilize the stock market and curb retail access to leverage exchange-traded funds.

Among the prominent decliners, memory chipmaker SK Hynix slumped 5.6 percent and internet giant Naver shed 3.4 percent.

Australian markets retreated from a near five-month high as surging U.S. bond yields on inflation fears sapped investors' appetite for risk.

The benchmark S&P/ASX 200 Index slid 0.8 percent to 8,967.70, with mining and consumer discretionary stocks pacing the decliners. The broader All Ordinaries Index settled 0.8 percent lower at 9,122.70.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slumped 1.5 percent to 13,762.78 despite a measure of consumer confidence surging to a five-month high in July.

Europe

European shares have moved higher on Thursday as investors digest the latest batch of earnings results and reassess the outlook for U.S. monetary policy in light of Wednesday's 9-3 split Federal Reserve decision to keep rates on hold.

In economic news, the Bank of England kept its interest rate unchanged, as widely expected, in a split vote.

The Monetary Policy Committee, led by Governor Andrew Bailey, voted 6-3 to hold the bank rate at 3.75 percent, which is the lowest rate since June 2023.

Meanwhile, the French economy rebounded in the second quarter, avoiding a recession, driven by robust consumption and exports, flash data from the statistical office INSEE showed.

Gross domestic product grew 0.2 percent sequentially, in contrast to the 0.1 percent fall in the first quarter. The rate came in line with expectations.

A separate set of data revealed that French household spending grew at a faster pace in June on energy and food consumption.

The French CAC 40 Index is up by 0.9 percent, the U.K.'s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.1 percent.

In corporate news, shares of Rolls Royce Holdings surged over 4 percent in London. The engineering company raised its full-year profit forecast after delivering strong operational and financial performance for the first half of the year.

Energy giant Shell rose about 1 percent after more than doubling its second-quarter profit.

BAE Systems edged up 1.1 percent. After a strong first half, the defense contractor upgraded its sales, profitability and cash flow targets for the year.

Lloyds Banking Group added nearly 2 percent. The lender revealed plans to cut costs, raised its interim dividend and announced a fresh £1bn share buyback after reporting a 23 percent jump in half-year profit.

Dutch lender ING gained 2 percent after reporting stronger-than-expected second-quarter earnings and lifting outlook.

Auto giant Stellantis slumped 5.3 percent after second quarter operating adjusted operating income came in below estimates.

Vinci rallied nearly 5 percent. The French infrastructure and concessions giant beat first-half profit and free cash flow estimates, driven in particular by the dynamitic trajectory of Energy Solutions.

Veolia, a global leader in environmental services, rose 1.7 percent after delivering solid first-half results and raising its full-year profit outlook.

IT services group Capgemini declined 1.7 percent after reporting a sharp fall in first-half net profit.

Air France-KLM climbed 1.5 percent and Deutsche Lufthansa was modestly higher after they submitted bids to acquire a controlling stake in TAP Air Portugal.

Hotel group Accor dropped 1.3 percent after reporting a marginal drop in Q2 revenue per available room.

Conglomerate Bouygues skyrocketed 7 percent after posting improved first-half results.

Schneider Electric surged 6.4 percent after the industrial group reported record first-half revenue and free cash flow.

Drugmaker Sanofi tumbled 3.6 percent despite raising its full-year sales forecast.

Societe Generale rallied 2.4 percent as the bank announced plans to launch a share buyback of €1.5 billion on Aug. 3 at the earliest.

German sportswear giant Adidas plunged more than 17 percent after higher marketing spending for the football World Cup resulted in lower-than-expected quarterly profit.

BMW advanced 1.7 percent. The company reported a slightly better-than-expected profit margin from its automotive business in the second quarter.

U.S. Economic News

The Labor Department released a report on Thursday showing a modest rebound in first-time claims for U.S. unemployment benefits in the week ended July 25th.

The report said initial jobless claims rose to 197,000, an increase of 9,000 from the previous week's revised level of 188,000.

Economists had expected jobless claims to climb to 200,000 from the 187,000 originally reported for the previous week, which marked the lowest level since September 1969.

Meanwhile, the Labor Department said the less volatile four-week moving average edged down to 202,750, a decrease of 5,000 from the previous week's revised average of 207,750.

A report released by the Commerce Department on Thursday showed a modest pullback in consumer prices in the U.S. of June.

The report said the personal consumption expenditures (PCE) price index slipped by 0.1 percent in June after climbing by an upwardly revised 0.5 in May.

Economists had expected prices to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

The Commerce Department also said the annual rate of growth by the PCE price index slowed to 3.7 in June from 4.1 in May, which was also in line with economist estimates.

Excluding food and energy prices, the core PCE price index crept up by 0.1 percent in June after rising by 0.3 percent in May. Core prices were expected to increase by 0.2 percent

The annual rate of growth by the core PCE price index dipped to 3.3 percent in June from 3.4 percent in May, matching expectations.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income rose 0.2 percent in June after climbing by 0.7 percent in May, while personal spending increased by 0.3 percent in June after growing by 0.9 percent in May.

U.S. economic growth unexpectedly slowed in the second quarter of 2026, according to a report released by the Commerce Department on Thursday.

The report said real gross domestic product jumped by 1.5 percent in the second quarter after surging by 2.1 percent in the first quarter. Economists had expected GDP to shoot up by 2.3 percent.

The Commerce Department said the unexpected slowdown in GDP growth reflected a downturn in government spending and decelerations in investment and exports that were partly offset by an acceleration in consumer spending.

Imports, which are a subtraction in the calculation of GDP, also increased more in the second quarter than in the first quarter, the report said.