Stock Market Today: Nasdaq Surges as Microsoft’s $450 Billion Rally Revives the AI Trade
Wall Street Rebounds on Big Tech Earnings
Markets staged a sharp comeback this week. This came after several volatile sessions tied to AI-sector jitters.
Here are the numbers:
- S&P 500: up 1.7%
- Nasdaq 100: up 3.4%
- Microsoft stock: surged 16% in a single day
That Microsoft jump added roughly $450 billion to the company’s value. It’s the largest one-day gain for any stock on record.
What Drove the Rally
The Nasdaq Composite finished 2.8% higher. This ended a six-day losing streak.
Meanwhile, the Dow Jones Industrial Average climbed 1.2%. It closed above 52,000 for the first time.
So what caused the turnaround? Strong results from Microsoft’s cloud division led the way. Other hyperscalers also posted better-than-feared earnings the same week.
But this rally didn’t come out of nowhere. Just a day earlier, the market told a very different story.
The Rough Patch Before the Rebound
The Dow had tumbled 2.2% the day before. That was its worst single-day drop since April 2025.
Two things were weighing on investors:
- The Federal Reserve’s decision to hold interest rates steady
- Ongoing worries about persistent inflation
Not Everyone Is Celebrating
The rebound hasn’t been universal, though.
A hedge fund founded by a former OpenAI researcher has been unwinding positions rapidly. It took steep losses on bearish bets against software stocks. It also lost money on exposure to struggling AI infrastructure names.
That fund is reportedly working with major banks now. The goal: manage the fallout in an orderly way.
The Bigger Picture
This week’s swings make one thing clear. Wall Street’s fortunes are now tightly tied to a handful of AI-driven megacap stocks.
More hyperscaler earnings are still ahead. So is more commentary from the Federal Reserve.
Investors should expect continued volatility. The big question on everyone’s mind: how much more room does the AI trade really have to run?