Microsoft’s Blowout Earnings Fuel Wall Street Rebound After Fed-Driven Selloff

(WS News) – US stocks staged a sharp comeback Thursday, with the Nasdaq Composite jumping 2.5 percent after Microsoft’s blowout earnings lifted tech shares and helped pull the market out of a Fed-fueled selloff earlier in the week.

Microsoft shares surged nearly 17 percent following its latest quarterly results, with Chief Financial Officer Amy Hood highlighting 27 percent year-over-year growth in Microsoft Cloud revenue and 43 percent growth for the Azure cloud unit. The company’s capital expenditures hit $41 billion for the quarter, a 69 percent increase, bringing full fiscal-year spending to $145 billion, with Microsoft on track for roughly $175 billion in capital spending across calendar 2026. Xbox also drew attention after executives signaled the gaming division would return to growth in fiscal 2027.

The Dow Jones Industrial Average advanced 1.1 percent and the S&P 500 rose 1.5 percent, with the tech-heavy rally coming a day after the Nasdaq-100 had entered a correction driven by steep declines in chip stocks. The rebound arrived even as investors continued to weigh fresh US strikes on Iran, a bond market selloff, and lingering concerns about the scale of artificial intelligence infrastructure spending across the industry.

Elsewhere in markets, Intercontinental Exchange agreed to acquire electronic trading platform MarketAxess Holdings in a $5.7 billion all-cash deal, a purchase price representing a 33 percent premium to MarketAxess’s prior closing price, sending its shares up nearly 30 percent in premarket trading. Sandwich chain Jersey Mike’s also made its market debut on the New York Stock Exchange, pricing its initial public offering at $23 a share and raising about $1 billion in a listing that valued the company at $7.3 billion, though shares opened below the IPO price before partially recovering.