AI Circle Daily
https://aicircle.news/archive/2026-07-31?category=finance&lang=en
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Microsoft surged 15% on strong Azure and Copilot growth, while Meta plunged 8% after missing revenue guidance and reporting a sharp drop in free cash flow.
Take: The market is voting with its wallet: AI spending must show revenue payoff. Meta's capex narrative is losing credibility.
Amazon shares surged about 10% to $258 in after-hours trading after CEO Andy Jassy justified massive AI investments, with AWS sales up 37% year-over-year, crushing estimates.
Take: Amazon shows AI capex can pay off. AWS growth is a bullish signal for the entire cloud sector.
Microsoft's rally added $450 billion in market cap in a single day, the largest one-day gain in stock market history.
Take: This catapults the AI trade to new extremes, but also amplifies downside risk from any disappointment.
The 30-year U.S. Treasury yield rose to a 19-year high after the Fed held rates steady with three dissents, as the market questions the Fed's policy path.
Take: The long-end spike signals the bond market has lost faith in the Fed's inflation control. Hike expectations are becoming self-fulfilling.
Wall Street saw its worst day of 2026 after the Fed kept rates unchanged with a divided vote, disappointing hopes for a dovish tilt.
Take: The market wanted a dovish signal but got a split Fed. Rate cuts are off the table, crushing risk appetite.
June PCE posted its first monthly decline in six years, driven by energy prices tied to a US-Iran ceasefire that has since collapsed. Oil is back to $88.
Take: The disinflation was a mirage. With oil rebounding, headline inflation will re-accelerate, making Fed easing even less likely.
Leopold Aschenbrenner's Situational Awareness fund has sold all its public stock holdings after steep losses, in a forced unwind.
Take: Leverage is unforgiving. Even AI geniuses get margin-called. This unwind may not be over.
The 30-year fixed mortgage rate climbed to 6.66%, the highest since July 2025, driven by rising long-term Treasury yields.
Take: Higher mortgage rates will choke housing further, weighing on consumer confidence and spending.
The China Beige Book survey shows factory activity decelerated in July, with shipments to the US declining after a brief recovery in June.
Take: Tariffs and geopolitical uncertainty continue to weigh on trade. Weak exports signal a fragile Chinese recovery.
China's vice premier expressed concerns over trade restrictions during talks with US Trade Representative Bessent and Greer, per Xinhua.
Take: US-China trade tensions remain elevated. Markets should brace for potential tariff escalation.