Morning Bid: Microsoft, Meta Surge; Dollar Rally Cools as Tariff Tensions Loom

Wall Street is riding a wave of optimism as tech megacaps Microsoft and Meta delivered blockbuster earnings, lifting U.S. stock futures more than 1%. Meanwhile, the dollar’s two-month high rally cooled slightly, with global central banks signaling a cautious tightening path amid the ongoing tariff drama led by President Donald Trump.

Tech Earnings Fuel Market Momentum

• Microsoft shares surged 9% and Meta jumped 12% in after-hours trading, driven by:

  • AI-driven revenue growth,

  • robust cloud performance,

  • and strong forward guidance.

• Microsoft’s valuation is now on track to surpass $4 trillion, while S&P 500 and Nasdaq futures climbed over 1% in pre-market trading.

• European and Japanese stocks mirrored U.S. optimism, while China’s markets lagged due to disappointing business surveys and trade pressures.

Dollar Rally Pauses After Fed Signals

The U.S. dollar index (.DXY), which hit a two-month high on Wednesday, eased slightly after the Bank of Japan nudged up its inflation and GDP forecasts, signaling potential rate hikes later this year.

• Federal Reserve officials hinted at no immediate rate cuts despite:

  • robust GDP, payroll, and inflation data,

  • and political pressure from the White House.

• Market outlook:

  • September rate cut odds now hover around 50%,

  • year-end easing projections trimmed to 35 basis points.

Tariff Tensions Shape Global Trade

As Trump’s August 1 trade deadline approaches, markets remain volatile:

• South Korea: 15% tariff agreed, down from 25%.

• Japan and Europe: Secured similar 15% deals.

• India: Facing 25% tariffs.

• Brazil: Hit with 50% tariffs and financial sanctions.

• China: Temporary tariff pact extended but still under higher rates.

In commodities, copper prices plunged nearly 20% after Trump announced 50% tariffs on imported copper pipes and wiring, albeit with exemptions.

Global Market Pulse

• Bank of Japan: Revised inflation and GDP forecasts upward, keeping hopes of future rate hikes alive.

• European Union: Plans to import $750B of U.S. energy by 2028, raising concerns about overreliance on American gas amid a China-dependent green transition.

• Upcoming Data:

  • U.S. June inflation today,

  • July employment report on Friday.

With megacap momentum, tariff uncertainty, and dollar strength at a tipping point, global markets enter August poised for volatility.