Tech Roars Back 5.5% as Microsoft and Chips Lead Post-Fed Rebound
Technology led the stock market today with a 5.45% surge, the biggest single-sector move of the session and the engine behind a broad rebound from Wednesday's Fed selloff. Microsoft jumped more than 16% on Azure growth, semiconductors ripped higher, and the Nasdaq snapped a six-day losing streak.
That one sector did the heavy lifting while defensive corners of the market got left behind.
The bounce came a day after the Dow plunged more than 1,100 points, its worst decline going back to April 2025, after the Fed held rates steady in a 9-3 FOMC vote. Thursday flipped the mood.
The Nasdaq Composite soared 2.78% to 25,122.18, the S&P 500 added 1.67%, and the Dow climbed 1.19%. Risk-on was back, and the numbers showed it.
Market Scorecard
Bottom Line: Thursday's session was a tech-driven relief rally, not a broad market recovery. The VIX collapse and Nasdaq rebound look constructive on the surface, but rising long-end yields and a narrow sector leadership picture leave the move unconfirmed. The June PCE print and big-tech earnings from Apple and Amazon will determine whether bulls can build on Thursday or give it back.
The VIX collapsed 15.39% to 17.48, a sign of fear draining out of the tape.
The story in the bond market was the split. The long end kept climbing, with the 30-Year yield at 5.208%, up 6.5 basis points and near levels last seen in 2007, while gold tacked on 3.36% to $4,170.30.
Sector Performance
The gap between winners and losers was stark. Technology's 5.45% run came as Micron and Advanced Micro Devices each jumped more than 13%, and the iShares Semiconductor ETF climbed over 8%.
The rally got extra fuel from reports that a distressed AI hedge fund, Situational Awareness, sold its public book to Citadel, clearing out forced selling that had weighed on chips.
Communication Services sat at the bottom, off 2.69%, dragged by Meta's 9% drop after a soft revenue forecast, while Consumer Staples fell 2.17% as money rotated out of defensives.
Want expert trading insights delivered daily?
Join thousands of traders who rely on Traders Agency for market analysis and trade ideas.
Join Traders AgencyWhy Did the Market React Sharply to the Fed's Decision?
The FOMC voted 9-3 to leave rates unchanged, only the second meeting since Kevin Warsh took over as Fed chair on May 22. Traders responded by cutting the odds of a near-term rate hike, yet they pushed long-term yields higher at the same time. Odds that the Fed leaves rates unchanged at its next meeting jumped 20 percentage points to 45%, per CME FedWatch.
That split shows up in the yield curve. The 2-year fell while the 30-Year Treasury hit its highest level since 2007.
In plain terms, the market thinks the Fed won't move fast on inflation now but may have to act harder later. Warsh argued the rise in long-term rates reflected positive economic news. Few in the market saw it that way.
Which Economic Data Moved Markets Today?
The advance Q2 GDP print landed before the open. It fed into the same debate driving yields: how hot the economy runs from here, and how quickly the Fed might need to respond.
What Should Traders Watch Before Friday's Open?
The PCE Price Index for June hits at 8:30 ET, the Fed's preferred inflation gauge and a direct test of the credibility questions hanging over Warsh. A hot number would add fuel to the long-end selloff that put the 30-Year near 2007 highs.
Apple and Amazon also report after Thursday's close, and with big tech splitting this earnings season, those results could set the tone for whether today's rebound holds.
After the biggest single-sector move of the day, the momentum favors the bulls, but tomorrow's inflation print gets the final word.
Key Takeaways
- Technology surged 5.45% on Thursday, the largest single-sector move of the session, driven by Microsoft's 16%+ jump on Azure growth and a broad semiconductor rally.
- The Nasdaq snapped a six-day losing streak, closing at 25,122.18 (+2.78%), while the S&P 500 gained 1.67% and the Dow recovered 615 points after Wednesday's 1,100-point plunge.
- The VIX dropped 15.39% to 17.48, signaling a sharp reversal in fear, but the long end of the bond market did not cooperate: the 30-Year yield climbed to 5.208%, near 2007 highs.
- The rebound was narrow. Defensive sectors were left behind as risk-on capital concentrated in tech and chips, meaning the rally's durability depends on whether that rotation broadens.
- Friday's June PCE Price Index at 8:30 ET is the immediate test. A hot inflation print would pressure the long end further and challenge the credibility of Thursday's bounce, with Apple and Amazon earnings adding another layer of risk.
DISCLAIMER: Traders Agency does not offer financial advice. The information provided is for educational purposes only and should not be considered financial advice. Traders Agency is not responsible for any financial losses or consequences resulting from the use of the information provided. Trading carries inherent risks and may not be suitable for all individuals. You are advised to conduct your own research and seek personalized advice before making any investment decisions, recognizing the potential risks and rewards involved.
See more from Traders Agency on Google
Make us a preferred source and our market analysis will appear more prominently in your Google Search, Top Stories, and AI results.
Add to Preferred Sources
