Microsoft and Meta shine with halo effect

Briefing.com Summary:

*Microsoft and Meta soared on earnings, sparking strong AI-driven market enthusiasm.

*Broader market sees gains, despite mixed earnings from other major tech names.

*Economic data shows resilient spending and moderating compensation pressures.

Microsoft (MSFT) and Meta Platforms (META) reported their quarterly results after yesterday’s close. They both blew past estimates, igniting another round of AI growth enthusiasm that is helping to power the equity futures market.

Currently, the S&P 500 futures are up 59 points and are trading 1.0% above fair value, the Nasdaq 100 futures are up 321 points and are trading 1.4% above fair value, and the Dow Jones Industrial Average futures are up 90 points and are trading 0.2% above fair value.

Microsoft is up 8.5% in pre-market trading, and Meta Platforms is up 11.2%. Those two stocks have a lot of pull on the market cap-weighted indices, and they are pulling alright. They aren’t alone, however.

Roblox (RBLX), Carvana (CVNA), Impinj (PI), eBay (EBAY), and Biogen (BIIB) are a handful of stocks that are also seeing robust gains in pre-market trading. There are some others, though, like Qualcomm (QCOM), Arm Holdings (ARM), and Lam Research (LRCX), that are getting hit with selling pressure after their reports.

Nonetheless, the Microsoft-Meta halo effect is outshining those dim showings, with reports from Amazon.com (AMZN) and Apple (AAPL) on tap after the close.

The earnings news is just one slice of the equity futures trade, albeit a large slice.

Other pieces of the bullish-minded pie include the news that the U.S. and South Korea have reached a trade deal in front of the August 1 deadline, a contention by Treasury Secretary Bessent that the U.S. has the makings of a deal with China, even though he thought it was a bit premature of Chinese officials to insinuate that there will be a 90-day extension of the tariff pause that expires August 12, and some otherwise pleasing economic data:

• Personal income increased 0.3% month-over-month in June (Briefing.com consensus: 0.3%) following a 0.4% decline in May; personal spending increased 0.3% month-over-month (Briefing.com consensus: 0.4%) following an upwardly revised unchanged reading (from -0.1%) in May; the PCE Price Index was up 0.3% month-over-month (Briefing.com consensus: 0.3%) and 2.6% yr/yr (vs 2.4% in May); and the core-PCE Price Index was up 0.3% month-over-month (Briefing.com consensus: 0.3%) and 2.8% yr/yr (vs 2.8% in May).
  • The key takeaway from the report is that real personal spending was up a modest 0.1% in June. That isn’t much, although it does show that consumers continue to have the capacity to spend in the face of higher prices.
• Initial jobless claims for the week ending July 26 increased by 1,000 to 218,000 (Briefing.com consensus: 220,000). Continuing jobless claims for the week ending July 19 were unchanged at 1.946 million.
  • The key takeaway from the report is the recognition that employers still remain reluctant to lay off employees, but employees that do get laid off are facing a tougher time finding a new job.
• The Q2 Employment Cost Index increased 0.9% (Briefing.com consensus: 0.8%) for the 3-month period ending in June 2025, with wages and salaries up 1.0% and benefit costs up 0.7%.
  • The key takeaway from the report is that compensation costs have moderated, which could serve to lower some of the inflation temperature at the Fed.

In other developments, the Bank of Japan left its policy rate unchanged at 0.50%, as expected, and China’s July Manufacturing PMI slipped further into contraction territory with a reading of 49.3 versus 49.7 in June. The dividing line between expansion and contraction is 50.0.

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Originally Posted July 31, 2025 – Microsoft and Meta shine with halo effect