Traders work on the floor of the New York Stock Exchange during morning trading on July 01, 2026 in New York City.
Michael M. Santiago | Getty Images
U.S. stocks rallied Thursday, rebounding from the prior day’s sell-off when the Federal Reserve decided to hold rates steady. Microsoft and semiconductors helped drive the gains.
The Nasdaq Composite finished 2.8% higher at 25,122.18, ending a six-day losing streak. The Dow Jones Industrial Average surged 613.92 points, or 1.2%, to end the day at 52,208.06, while the S&P 500 climbed 1.7% to settle at 7,437.63.
Microsoft shares jumped 16%, after reporting growth from its Azure business. Semiconductors rallied, with the iShares Semiconductor ETF (SOXX) higher by more than 8%. Micron Technology surged 18%, while Advanced Micro Devices were up more than 13%.
The momentum trade returned, with the iShares MSCI USA Momentum Factor ETF (MTUM) higher by more than 5%. Memory stocks surged, and South Korea’s memory maker SK Hynix jumped more than 17%.
In contrast, Meta Platforms was down 8% after issuing a soft revenue forecast and a 91% drop in second-quarter free cash flow.
Nasdaq Composite, 1-day
“This is ultimately a tale of two AI investment strategies,” said Stephen Evans, chief investment officer at Pave Finance. “One company is increasing profits while spending heavily, while the other is allowing those costs to eat into its bottom line.”
Stocks recovered following a dismal session. On Wednesday, the Dow plunged more than 1,100 points, marking its worst decline going back to April 2025. A selloff that started earlier in the day accelerated in the late afternoon.
Yields spiked, as investors worried that the Fed was falling behind on its fight against inflation. The 30-year yield hovered near 2007 highs. It jumped 6 basis points after regular trading Wednesday to above 5.2%. The rest of the yield curve was little changed.
One of the busiest weeks of corporate earnings continues Thursday, with Amazon, Apple and Coinbase set to report after the close.
