Top News Today: Stocks Rally as Microsoft Earnings Quell AI Fears

MARKET WRAPS

STOCKS: Stocks rallied as strong Microsoft earnings quelled fears about the sustainability of the artificial-intelligence boom.

TREASURYS: Treasury yields finished mixed, with the yield on the 30-year bond closing at the highest level in 19 years as the yield on the two-year note retreated.

FOREX: The U.S. dollar fell sharply as traders bet the Federal Reserve wouldn't raise rates as soon as previously assumed.

COMMODITIES: Oil futures ticked down, but remained near recent highs, as tit-for-tat attacks in the Middle East continued.

HEADLINES

U.S. Economic Growth Slowed to 1.5% in Second Quarter

U.S. economic growth slowed in the second quarter, weighed down by strong imports to fuel the artificial-intelligence boom.

The AI surge has become such a huge part of the economy that it's a big growth driver and also affects trade in a way that can offset some of that growth. Specifically, high demand for imported components like semiconductors weighs against the U.S. growth calculation because the products aren't made in the U.S.

At the same time, Thursday's gross domestic product report included positive signs on other fronts. Consumers increased their spending, shrugging off a surge in gas prices fueled by the conflict with Iran. Business investment remained strong as companies kept investing in IT equipment and software for the AI build-out.

Banks in Talks to Lend $15 Billion for Anthropic Data Center Backed by Google

A data-center developer working with Anthropic is in advanced talks to borrow $15 billion to build a massive new campus and power plant in Texas, with Google providing financial guarantees and chips, according to people familiar with the matter.

Under the deal being discussed, a consortium of banks led by Morgan Stanley would lend $15 billion to Nexus Data Centers to build the campus in Hubbard, Texas, which would have its own natural-gas power plant capable of generating 1.6 gigawatts of electricity. The deal could be announced as soon as today.

To help Nexus raise the debt, Google has provided guarantees for billions of dollars of Anthropic's lease and power-payment obligations in the event the startup defaults, according to people familiar with the matter. Google's support was limited and covered the minimum amount the banks required to get the financing done, one of those people said.

Mortgage Rates Jump to a One-Year High

Mortgage rates jumped to their highest level in a year, dealing another blow to a long-stalled housing market that shows little sign of recovering.

The 30-year fixed rate averaged 6.66% this week, up from 6.58% the week prior, according to Freddie Mac. That marked the fourth consecutive week of rising rates, as intensifying conflict in the Middle East pushed up inflation expectations and a divided Federal Reserve sowed doubt about the path of interest rates.

Mortgage rates are closely tied to the 10-year Treasury yield, which hit an 18-month high last week due to rising oil prices.

Fed's Preferred Inflation Index Cooled but Remained Elevated in June

The inflation gauge tracked by the Federal Reserve cooled in June but remains well above the central bank's 2% target, a challenge that has animated keen speculation about how the Fed is likely to respond under new Chairman Kevin Warsh.

The price index of personal-consumption expenditures declined by 0.1% last month as lower energy prices helped pull down the overall price level, the Commerce Department said Thursday. That yielded a 12-month PCE inflation rate of 3.7%, a decline from 4.1% in May.

Setting aside volatile food and energy categories, a 0.1% price increase in June gave rise to a 12-month core PCE inflation rate of 3.3%, slightly cooler than the 3.4% recorded in May.

Yum Brands Says It's Moving Quickly to Address Cyclospora Outbreak

Yum Brands said its teams are working quickly and transparently in response to one of the biggest food-safety crises in Taco Bell's history, after public-health officials linked the shredded lettuce garnishing some of its menu items to a rapidly expanding cyclospora outbreak.

"First and foremost, the safety of our consumers is our highest priority, " Chief Executive Chris Turner said to open the company's second-quarter earnings call Thursday.

Taco Bell has seen a meaningful sales impact in recent weeks, executives said, with U.S. same-store sales down about 2% quarter-to-date in July. The company expects the impact to be temporary and said sales trends are already improving.

NYSE Owner to Buy MarketAxess in $6 Billion Deal

Intercontinental Exchange, the parent company of the New York Stock Exchange, agreed to acquire MarketAxess, an electronic trading platform for fixed-income markets, for $6 billion.

Intercontinental Exchange, known as ICE, will pay $167 a share in cash for MarketAxess, the companies said Thursday. That represents a 33% premium based on MarketAxess's closing price on Wednesday.

Shares of MarketAxess jumped 30% to $163.62 in premarket trading Thursday, while ICE shares were up slightly.

Jersey Mike's Stock Slides Below IPO Price in Market Debut

Jersey Mike's Subs is a sandwich chain that professes to make "A Sub Above." Hot, cold. Meats and cheese are sliced in front of customers. And regulars know "Mike's Way" (onions, tomatoes, lettuce, oregano, and salt) and "The Juice" (an olive oil blend and red wine vinegar). But despite its popularity with consumers, investors weren't taking a bite of the stock in its first day of trading.

The New Jersey-based company's stock made its debut Thursday on the New York Stock Exchange with the ticker symbol JMKE. Shares slid 4% in late afternoon trading to about $22.

The chain sold 43.5 million shares in the initial public offering at $23 a share, the midpoint of its expected $21 to $25 range. At that price, it raised $1 billion and has a market value of $7.3 billion.

Citadel Buys Situational Awareness's Stock Portfolio After Big Losses in AI

Situational Awareness, the once-highflying AI-focused hedge fund, sold the bulk of its stock portfolio to Ken Griffin's investment firm Citadel after suffering deep losses, according to people familiar with the matter.

It marks a sudden downfall for Situational, led by former OpenAI employee Leopold Aschenbrenner. It had amassed well over $20 billion in assets under management since its founding just around two years ago, making it one of the fastest-growing firms in years. Aschenbrenner, who is in his mid-20s, was seen by some as an AI oracle, with other investors closely tracking his firm's movements as it placed big, leveraged bets.

As investors shed positions in artificial-intelligence related stocks, Situational was under pressure to raise cash, either through sales of holdings or new capital commitments, to meet margin-call demands from its lenders, some of the people familiar with the matter said.

Altria Profit Falls on Softer Oral-Tobacco Performance

Altria Group had virtually flat revenue and lower profit in the second quarter, as lower sales of its nicotine pouches offset some of the growth in its cigarettes business.

The tobacco company on Thursday posted a profit of $2.3 billion, or $1.37 a share, compared with $2.38 billion, or $1.41 a share, a year earlier.

Stripping out certain one-time items, adjusted per-share earnings were $1.48, behind the $1.50 anticipated by analysts, according to FactSet.

KKR's Asset Sales Defy Private-Equity Exit Slowdown

KKR enjoyed firm-record asset sales in the second quarter despite the private-equity industry's ongoing slowdown in exits, helping the New York alternative-investments manager surpass analysts' earnings forecasts.

KKR's profit and revenue in the quarter were also buoyed by improved management fees and fundraising. The firm recorded a profit of $660.1 million, or 70 cents a share, for the three months ended June 30, up from $472.4 million, or 50 cents a share, a year earlier.

As in previous quarters, KKR executives on Thursday insisted that the struggles the private-equity industry is experiencing don't apply to their firm.

TALKING POINT Blue Owl Leans Into Real Assets to Buffer Private-Credit Woes

Blue Owl Capital is aggressively emphasizing its transition to a multi-strategy alternative assets manager as it grapples with investor withdrawals from some of its direct-lending vehicles and investments in software businesses.

The firm helped pioneer the private-credit industry over the past decade, but now direct lending accounts for only about 35% of its total assets, from nearly 50% two years ago. At the same time, capital managed through its business focused on real assets has grown from $12 billion in 2021, when the segment was formed, to $89.4 billion at the end of June.

Over the past 12 months, nearly 75% of the capital raised from outside investors went into non-direct lending segments, including real assets and general partner strategic capital, a strategy that backs other asset managers. The firm's direct-lending vehicles include business development companies that back midsized borrowers, such as in the software industry.

Concerns about disruption threats posed by artificial intelligence technology that arose last year helped generate a surge in withdrawal requests from BDCs and other credit vehicles across the nonbank-lending industry that have backed software makers.

Overall, BDC investors sought to pull nearly $30 billion from widely held private-credit funds in this year's first half, including $15.6 billion in the second quarter. One Blue Owl BDC, Blue Owl Technology Income Corp., received redemption requests for roughly 41% of its shares in the first quarter alone.

But Blue Owl executives said the trend in withdrawals appears to be easing, echoing comments from Blackstone leaders last week that they had seen a material dropoff in such moves this month.

(MORE TO FOLLOW) Dow Jones Newswires

July 30, 2026 16:37 ET (20:37 GMT)