Microsoft Rips 9% as Meta Tanks 9.5% After Hawkish Fed Hold

Microsoft jumps 9% on Azure +43% while Meta drops 9.5% on capex miss after Warsh Fed holds hawkish 9-3. Samsung sets memory record. Kospi hits twin halts.

TLDR

Wednesday delivered the most divided FOMC vote since September 2016, with Warsh’s Fed holding rates at 3.50% to 3.75% while three regional presidents dissented in favour of a hike. Long yields tore higher, the 30-year Treasury closed at 5.21% (a 19-year high), and equities took the hit: Dow -2.19% (worst since April 2025), S&P 500 -1.52%, Nasdaq Composite -1.74%. After the bell, Microsoft printed the number the market wanted, Azure +43% constant currency, revenue $90.01 billion versus $87.62 billion expected, and shares jumped roughly 9% in after-hours. Meta printed strong revenue too, $60.80 billion or +28% YoY, but missed EPS, watched free cash flow collapse to $784 million on record capex, and dropped 9.5%. In Seoul, Samsung reported a record 89.2 trillion won memory operating profit, with HBM4 sales set to triple in Q3. SK Hynix’s own record print on Wednesday still missed Street and helped fire back-to-back circuit breakers on the Kospi, a first in the exchange’s history.

Market Regime

Two forces are colliding, and Wednesday made the tension explicit. The AI infrastructure trade, the single largest driver of index gains this year, is now being interrogated on capital efficiency. Meta printed record revenue and a free cash flow line that fell 91% year on year to $784 million as quarterly capex hit $31 billion. Microsoft printed the mirror image: Azure reaccelerating to 43% growth on a capex base the market has already priced in. The split reaction (MSFT roughly +9%, META -9.5% after hours) says the tape is willing to pay for AI spend that shows revenue attach, and unwilling to pay for spend that only shows the bill.

Meanwhile the rate side of the tape is repricing. Warsh’s Fed removed forward guidance and delivered a 9-3 hold, with Hammack, Kashkari and Logan dissenting in favour of a 25bp hike. Long-end yields moved on the message: 30-year at 5.21% is a 19-year high, and September hike odds briefly spiked to 77% before settling near 57%. The setup into Thursday is a hawkish rate backdrop meeting a hyperscaler tape that is now sorting winners from spenders in real time, all with Middle East oil pressure (WTI $84.31) adding a third variable.

Bullish Factors

• Microsoft cleared the two bars that mattered: Azure at +43% constant currency versus 39-40% guide, and Intelligent Cloud revenue at $32.9 billion (+29% YoY). Full-year 2026 capex plans held steady near $190 billion, giving the market a signal that spending is not accelerating without demand backing it.
• Samsung’s Device Solutions memory division posted an all-time record 89.2 trillion won operating profit in Q2, and management guided HBM4 sales to more than triple in Q3 and account for over 60% of HBM revenue in H2. Samsung called the memory supply-demand gap structurally wider through 2027.
• SK Hynix disclosed five-year long-term supply agreements with roughly ten customers, including NVIDIA, and pushed back directly on the AI peak narrative on its earnings call. Kioxia stake gains lifted pretax profit to 122.7 trillion won.
• The Nikkei 225 recovered to 61,867 (+0.7%) on Thursday, with Tokyo Electron +4.4% and Kioxia +7.5% as the Asian memory chain caught a bid on the Samsung print.
• Ford beat Q2 and raised full-year profit and cash flow guidance, with shares rallying premarket Wednesday before broader tape pressure took over.

Bearish Factors

• The FOMC vote was the most divided since September 2016. Warsh has removed forward guidance, and the September meeting is now genuinely two-way. Bespoke flagged Wednesday as the worst second Fed day for a new chair in modern history.
• Meta’s operating margin compressed from 43% to 31% year on year, net income fell 14% to $15.85 billion despite +28% revenue growth, and free cash flow collapsed from $8.55 billion a year ago to $784 million. Full-year capex range was raised to $130 billion to $145 billion (floor up from $125 billion), signalling the spend curve is still climbing.
• SK Hynix’s record 76% operating margin was not enough to clear a consensus that had modelled 64 trillion won in operating profit versus the 60.54 trillion won delivered. The Kospi has now fallen 38% from its June 9,100 peak, closing Thursday at 5,593.56.
• The 30-year Treasury at 5.21% is a 19-year high, and the 10-year at 4.70% is repricing longer-duration equities directly. Nasdaq 100 closed in correction, more than 11% off the June high.
• Brent crude at $88.60 and WTI in the mid-$80s reflect an active US-Iran exchange this week, with Strait of Hormuz traffic still limited. Any escalation adds a fresh inflation input the Fed has already flagged as a concern.

Asian Markets This Morning

Thursday’s Asian session split hard. The Nikkei 225 rebounded 0.7% to 61,867, led by Tokyo Electron (+4.4%) and Kioxia (+7.5%) as memory-chain readacross from Samsung’s record print pulled the tape higher. Kospi swung intraday and settled at 5,593.56, down 1.2%, with SK Hynix off another 5.6% and Samsung Electronics off 0.7% despite the record earnings. Hang Seng edged up 0.2% to 25,857, Shanghai Composite gave back 0.7% to 3,801, and the ASX 200 slipped 0.8%. India’s Sensex traded flat. Brent held near $88.60.

What Moved Wall Street Today

Wednesday closed with the Dow off 1,153 points (-2.19%) at 51,594.14, its worst session since April 2025. The S&P 500 finished at 7,316.15 (-1.52%), a one-month low. The Nasdaq Composite closed at 24,442.94 (-1.74%), more than 10% off the June record; the Nasdaq 100 closed in correction, off 11% from the June high. Industrials led decliners (-3.42%), technology (-2.36%) followed. Only energy and consumer defensive held green, lifted by oil.

The Fed delivered the widely expected hold at 3.50% to 3.75%, but the three dissents and Warsh’s decision to strip out forward guidance were read as hawkish. The 10-year yield jumped 7bps to 4.70%; the 30-year gained 10bps to 5.21%, its highest since 2007. September hike odds briefly hit 77% before settling near 57%.

Assets in Focus

MSFT

Fiscal Q4 revenue $90.01 billion (+18% YoY) beat the $87.62 billion consensus; adjusted EPS $4.74. Azure grew 43% constant currency versus 39-40% guide. Intelligent Cloud segment revenue $32.9 billion (+29% YoY). Full-year 2026 capex plans held steady near $190 billion. Shares jumped roughly 9% after hours to erase the Wednesday session drop.

META

Q2 revenue $60.80 billion (+28% YoY) beat, but diluted EPS $6.18 missed consensus of $7.22. Net income $15.85 billion (-14% YoY). Operating margin fell to 31% from 43% a year ago. Reality Labs operating loss $4.62 billion. Free cash flow collapsed to $784 million from $8.55 billion YoY on $31.08 billion quarterly capex. FY26 capex range raised to $130 billion to $145 billion. Shares -9.5% after hours.

SMSN

Consolidated Q2 revenue 171.5 trillion won (+28% QoQ, +129% YoY, all-time record). Total operating profit 89.5 trillion won (+56% QoQ, +1,814% YoY). DS memory division operating profit 89.2 trillion won. Operating margin 52%. HBM4 revenue guided to triple in Q3 and represent over 60% of HBM revenue in H2. Samsung flagged a widening memory supply-demand gap into 2027. Stock -0.7% Seoul.

SKHX

Revenue 79.32 trillion won (+257% YoY, record). Operating profit 60.54 trillion won (+557% YoY, record). Operating margin 76%, ahead of both NVIDIA and TSMC. HBM4 mass shipments began in Q2, with H2 ramp planned. Kioxia stake gains lifted pretax profit to 122.7 trillion won. 2026 capex raised to the high-40 trillion won range from 30.2 trillion won. Missed consensus operating profit near 64 trillion won. ADR SKHY closed Wednesday at $130.17, -8.98%.

NVDA / SOX

Semiconductors were the worst-hit sub-sector Wednesday, with the SOX index off 5.33% as memory sector reactions and rate repricing hit hyperscaler-adjacent names. NVIDIA fell alongside chip peers into the print window, with weekly loss extending past 10%.

Index Levels to Watch

Reference points for context, not entry or exit signals. S&P 500 (7,316) sits at its one-month low; a break lower opens the 7,200 area. Nasdaq Composite (24,443) is more than 10% off the June record, with 24,000 the next round-number pivot. Dow (51,594) fell through 52,000; below sits the 51,000 area last visited in early July. Nikkei 225 (61,867) needs to reclaim 62,000 for the bounce to build. Kospi (5,593) is trading roughly 38% below its June all-time high; near-term the 5,500 level has held two circuit-breaker days. 10-year Treasury yield (4.70%) and 30-year (5.21%) are the macro read-through for equity valuations into Amazon and Apple after the bell Thursday.

Disclaimer

This blog is for informational and educational purposes only and does not constitute investment advice, a solicitation to buy or sell any security, or a recommendation of any trading strategy. Past performance is not indicative of future results. Trading in global futures involves substantial risk and is not suitable for every investor. Please consult a SEBI-registered financial advisor before making any investment decision. CoinDCX and its affiliates do not accept liability for any loss or damage arising from reliance on the information presented here.

Frequently Asked Questions