Microsoft leads a rally on Wall Street, while worries about inflation remain in the bond market

NEW YORK — U.S. stocks are rebounding Thursday after Microsoft leaped on hopes that its big spending on AI is translating into profits, while computer-chip companies clawed back some of their sharp recent losses. The S&P 500 rallied 1.1% and recovered two-thirds of its drop from the prior day, which was its worst in seven weeks. The Dow Jones Industrial Average was up 287 points, or 0.6% as of 11:45 a.m. Eastern time.

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Scoop News DeskAnchorage, Alaska · Published Thursday, July 30, 2026 at 4:48 PM UTCUpdated Thursday, July 30, 2026 at 7:43 PM UTC

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That leaves investors questioning whether the Fed is prepared to act if inflation worsens, or whether it is relying on financial markets to achieve the same outcome, according to Seema Shah, chief global strategist at Principal Asset Management. “If investors conclude that the latter is true, the credibility of the Fed’s inflation-fighting commitment could come under increasing scrutiny. In the bond market, longer-term Treasury yields held a bit steadier following their sharp accelerations Wednesday.

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