Microsoft and Amazon's better-than-expected financial results triggered a strong rally in US tech stocks. The optimistic mood boosted risk appetite in global markets, leaving behind concerns over artificial intelligence spending. Additionally, Iran's announcement that it was holding talks with Oman over the Strait of Hormuz eased geopolitical risk perceptions, supporting markets.
Tech leadership in US markets
Strong revenue from Microsoft's Azure cloud services sent its shares up 15.5%. Meta, despite revenue growth, fell 7.95% due to a decline in net profit and reduced free cash flow. In the semiconductor sector, Micron Technology rose 18.4% and AMD gained 13%.
With these developments, the Dow Jones index rose 1.19%, the S&P 500 gained 1.66% and the Nasdaq index climbed 2.78%. The US economy grew 1.5% in the second quarter, below expectations, while the core personal consumption expenditures index tracked by the Fed rose 0.1% month-on-month. Initial jobless claims increased to 197,000.
The US 10-year Treasury yield fell 3 basis points to 4.65%. Brent crude oil dropped 1.4% to $85.4 per barrel, and gold declined 0.5% to $4,082 per ounce. After the market close, Apple lost 6.1% on a forecast of a supply-chain-driven sales decline, while Amazon's 244.9% surge in net profit lifted its shares 10.4%.
Mining stocks support Europe
European bourses closed mostly higher, supported by strong corporate earnings and a rise in precious metals that boosted mining shares. The Bank of England (BoE) voted 6-3 to keep its policy rate unchanged at 3.75%.
Eurozone second-quarter GDP grew 0.4%, beating expectations. German inflation accelerated to 0.8% month-on-month in July. The DAX 40 rose 0.6%, the CAC 40 gained 0.92% and the FTSE MIB 30 added 1.29%, while the FTSE 100 slipped 0.1%.
Spillover to Asian markets
The US tech rally carried over into Asian markets. In South Korea, SK Hynix shares surged 29.7% and Samsung Electronics jumped 25%. The Bank of Japan (BoJ) kept its policy rate steady at 1%.
The dollar/yen pair, after falling 3.3% to 157.97 yesterday, rose 0.8% to 160.7 today. Tokyo CPI rose 2% in July. Near the close, the Nikkei 225 was up 4%, the Kospi up 16% and the Shanghai Composite up 0.8%; the Hang Seng edged down 0.1%.
Borsa Istanbul closes lower
Despite the global rally, the BIST 100 index on Borsa Istanbul lost 1.55% to close at 13,292.93 points. The August futures contract on the BIST 30 index rose 0.1% in the evening session on the VİOP. The dollar/lira traded at 47.4890 in the interbank market.
Analysts noted that 13,200 and 13,100 points are support levels for the BIST 100, while 13,400 and 13,500 points are resistance. Today, domestic financial accounts and monetary and banking statistics will be followed, along with Eurozone inflation, the German unemployment rate and the US Michigan consumer sentiment index.
