U.S. Inflation Cools + Microsoft's Strong Earnings Beat Drives Violent Stock Market Rebound, Japanese and South Korean Stock Markets Follow Suit

BlockBeats News, July 31st. Last night, this morning, the U.S. Q2 core PCE inflation cooled, leading to a sharp drop in short-term rate hike expectations. On the other hand, Microsoft's better-than-expected earnings report seemed to once again boost confidence in AI investments, combined with the end of selling pressure from the liquidation of large AI funds earlier, triggering a short squeeze rebound in tech and momentum stocks. The S&P 500 closed up 1.66%, the Nasdaq 100 rose 3.4%, marking the third-largest gain of the year.

According to BIT (bit.com) market data, Microsoft surged over 15%, achieving the largest single-day market cap increase in Wall Street history for a single stock, also marking its largest single-day gain in 18 years. In addition, storage stocks soared, with SanDisk rising nearly 26%, the Wall Street AI stock god's concept stocks NBIS and IREN, in which he was heavily invested, rose over 27% and 30% respectively. U.S. stock Micron Technology also saw a rare rebound, rising by 17.52%. Former AI star stock Marvell Technology rose by 12.18% and Micron rose by 18%.

It is worth noting that the foreign exchange market today is full of twists and turns, with the yen skyrocketing more than 3% intraday, reportedly due to Japan's intervention. The U.S. dollar index once fell by over 0.9%, marking the largest single-day decline since January, erasing all the gains accumulated since Powell's first appearance. Meanwhile, South Korean foreign exchange authorities also reportedly conducted a rare dollar-selling intervention on Thursday.

U.S. Treasury Secretary Bensont responded, suggesting that Japan may have intervened in the foreign exchange market. In my view, the yen seems to be "severely undervalued."

Apple released its third-quarter financial report for the quarter ending June 27, 2026, with revenue growing by about 16% year-on-year to $1,094.2 billion, slightly higher than analysts' expectations, and earnings per share (EPS) increasing by about 29% year-on-year to $2.02, nearly 7% higher than analysts' expectations. Apple's CFO Kevan Parekh stated that EPS and operating cash flow for the third quarter both reached all-time highs for the company during the same period.

However, market performance shows that Apple's seemingly better-than-expected earnings report did not impress investors. Prior to the earnings report, Apple's stock price fell by 1.4% during regular trading hours, and after the report was released, the post-market decline further widened, falling by over 4%.

In early trading, the Japanese and South Korean stock markets opened higher, following the rebound in the US stock market. According to Bitget, the South Korean KOSPI Index saw its initial gain rapidly expand to 13%. The heavyweight stock SK Hynix saw its gain increase to 24%, while Samsung Electronics rose over 20%. The Nikkei 225 Index surpassed 64,000 points, rising 3.57% intraday.