US stocks rebound on strong MS earnings, semiconductor shares rise

New York's stock market experienced a robust rebound, recovering from a previous downturn fueled by the Federal Reserve's hawkish stance on interest rates. The Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite all registered substantial gains, breaking a six-day losing streak.

The primary catalyst for the market's surge was Microsoft's impressive financial results. The tech giant reported a 43% increase in revenue for its Azure cloud service in the fourth quarter, reaching its highest point since 2022. This strong performance propelled Microsoft's stock up by 16%, creating a ripple effect across the market. Consequently, semiconductor exchange-traded funds (ETFs) like iShares Semiconductor ETF (SOXX) saw gains of over 8%, with individual stocks such as Micron and AMD soaring by 18% and 13%, respectively. SK Hynix's American depositary receipts also jumped over 17%, driven by AI momentum.

However, the rally was not uniform across all major tech companies. Meta Platforms experienced an 8% decline in its stock price, attributed to a significant 91% drop in free cash flow for the second quarter and a less optimistic earnings outlook. This contrasted with other major tech players like Apple and Amazon, whose earnings surpassed market expectations.

Apple announced its fiscal third-quarter revenue rose 16.4% year-over-year to $109.42 billion, while Amazon's second-quarter revenue increased by 20% to $200.61 billion, leading to a roughly 7% rise in its stock during after-hours trading. Analysts suggest that the diverging stock performances reflect a market increasingly focused on whether Big Tech companies' substantial investments in artificial intelligence are translating into tangible profitability.