Wall Street closed sharply higher on Thursday, July 30th, driven by a significant rally in chip stocks and Microsoft. The PHLX chip index surged 8.2%, with Micron Technology jumping 18%, Sandisk soaring 26%, and Advanced Micro Devices (AMD) up 13%. This rebound trimmed the chipmakers' July plunge, though they were still set for their biggest monthly slide since 2008. Microsoft's stellar forecast, which projected quarterly sales and cloud growth above expectations and reported capital expenditures below estimates, helped alleviate fears regarding heavy spending on AI infrastructure. Microsoft's stock jumped over 15%, adding approximately $450 billion to its market value, marking the greatest single-day increase for a company on Wall Street.
The broader market also saw strong gains. The S&P 500 climbed 1.66% to 7,437.63 points, the Nasdaq advanced 2.78% to 25,122.18 points, and the Dow Jones Industrial Average rose 1.19% to 52,208.06 points. The Nasdaq 100 gained 3.4%, its biggest advance since April 2025. Other notable chip and AI-related stocks that soared included Bloom Energy Corp., CoreWeave Inc., Lam Research (up over 21%), Western Digital (up over 15%), Applied Materials (up over 14%), and Marvell Technology (up over 10%). The VanEck Semiconductor ETF (SMH) jumped 8%, its best day since April of this year.
Analysts attributed the market's strength to strong corporate earnings, ongoing AI adoption, a resilient economy, and favorable financial conditions. Sameer Samana at Wells Fargo Investment Institute stated, "The bull market remains intact." Ulrike Hoffmann-Burchardi at UBS Chief Investment Office suggested that investors manage concentration risk by diversifying into defensive tech stocks, despite remaining constructive on the AI growth story. The rally occurred despite some concerns, as Qualcomm fell 2.6% after forecasting fourth-quarter profit below estimates, and Amazon rose 3.9% while Apple dipped 1.4% ahead of their earnings reports. Investors had previously been cautious due to heavy AI spending and negative cash-flow reports from companies like Alphabet and Tesla.
