Microsoft, Meta Surge on AI Investment; Trump's Tariff Deals | Bloomberg Daybreak

Tech Stock Surge Driven by AI Investment

• 🚀 Microsoft shares reached an all-time high, nearing a $4 trillion valuation, fueled by a 39% sales increase in its cloud business, indicating strong AI adoption.
• 💡 Analyst Dan Ives of Wedbush Securities sees this as a watershed moment for big tech, raising his 12-month price target for Microsoft to $625.
• 📈 Meta Platforms also saw significant gains, with shares up nearly 12%, driven by strong advertising growth and increased spending on AI initiatives.
• 🧠 Meta is applying AI to boost user engagement, evidenced by an 11% increase in ad impressions despite steady user growth.

Big Tech Earnings and AI Strategies

• 💰 Apple and Amazon are set to report earnings, with investors keen on Apple's AI strategy amidst talent poaching and Amazon's focus on monetizing AWS.
• ⚠️ Qualcomm shares fell over 5% due to concerns about lackluster growth and the potential impact of tariffs on the broader chip industry.
• 🚗 Ford warned of a sharp profit drop due to tariffs, with a net tariff impact of $2 billion, impacting its competitiveness.

Federal Reserve and Economic Policy

• 🏦 The Federal Reserve kept interest rates unchanged, despite pressure from the White House, citing moderated growth and elevated uncertainty.
• 📉 Fed Chair Jay Powell indicated no decision has been made on easing policy in September, causing the dollar to drop.
• 🗣️ Dissenting votes from Governors Michelle Bowman and Christopher Waller marked the first time in over 30 years that two members voted for a rate cut.

Global Trade and Tariffs

• 🌍 President Trump announced 15% tariffs on imports from South Korea and 25% on imports from India, criticizing India's purchases of Russian energy and weapons.
• 🤝 Deals have been agreed upon or are being drafted with countries including Thailand, Cambodia, and Taiwan, as part of an effort to create a new global trade order.
• 💬 JP Morgan Chase CEO Jamie Diamond met with President Trump to discuss the economy, trade, and financial regulation, signaling a warming dialogue.

Other News and Developments

• ⛈️ A significant threat of heavy rain and flash flooding is expected in the Northeast, impacting major cities during the commute.
• 🗳️ Former Vice President Kamala Harris will not run for California governor, potentially leaving open a 2028 presidential bid.
• 🕊️ Pressure is increasing globally to end the war in Gaza, with Arab and Muslim countries calling for Hamas to disarm, while UN officials report widespread starvation.
• ⚾ In sports, the Yankees won a wild game against the Rays 5-4 in 11 innings, while the Mets and Red Sox faced losses.