Meta and Microsoft Earnings Fuel 8% to 11% Stock Gains on July 31

U.S. stocks extended their gains on July 31, 2025, with the Nasdaq and S&P 500 rising amid strong earnings reports from Meta and Microsoft. The tech-driven rally pushed Microsoft’s shares up over 8% in after-hours trading, while Meta surged more than 11% in pre-market activity. Both companies reported quarterly results that exceeded expectations, with Microsoft posting fiscal fourth-quarter earnings of $3.65 per share, above the $3.37 per share anticipated by analysts [1]. Meta highlighted robust digital ad revenue and an aggressive AI investment strategy, contributing to its significant pre-market jump [12]. The combined performance added more than $500 billion to the market capitalization of the two tech giants, with Microsoft’s valuation nearing $4 trillion [5].

The positive sentiment from the earnings reports translated into broader market gains, with Nasdaq 100 futures surging 1.3%, S&P 500 futures up 0.9%, and Dow Jones futures rising 0.26% [4]. The rally marked record levels for futures contracts, signaling renewed confidence in the tech sector’s ability to drive growth. The performance was particularly notable given the mixed signals from global markets, where Asian indices like the Hang Seng and CSI 300 closed lower [10]. In contrast, Indian markets remained relatively stable, with the Nifty 50 showing slight gains and the Sensex holding steady [10].

Investor focus remains on the Federal Reserve’s upcoming policy decisions, as the central bank has held interest rates steady for the fifth consecutive meeting. President Donald Trump reiterated his criticism of Fed Chair Jerome Powell, accusing him of being “too political” and harming the U.S. economy. Analysts continue to debate the timing of potential rate cuts, with former St. Louis Fed President James Bullard suggesting a 100 basis points cut could occur over the next year if inflation continues to moderate [10]. Markets have priced in a 50% probability of a rate cut in September, reflecting cautious optimism about the Fed’s policy path [10].

Meanwhile, trade developments also contributed to market sentiment. The U.S. finalized a trade agreement with South Korea, which now faces 15% tariffs but has committed $350 billion in energy-related investments. Similar agreements are in place with the U.K., European Union, Japan, and Vietnam, offering a degree of stability ahead of President Trump’s August 1 deadline for broader trade decisions. However, negotiations with China remain ongoing, and a deal with Canada appears unlikely due to political disagreements [10].

The continued strength in tech earnings has reinforced expectations for an AI-driven rally, with investors closely monitoring the sector’s influence on broader market indices. The upcoming Personal Consumption Expenditures (PCE) index and labor market data will be critical in shaping the Fed’s next move, but the performance of Big Tech companies has already set a positive tone for the near-term outlook [7].