The S&P 500 and Nasdaq climbed to new record highs on Thursday, as Microsoft’s blockbuster earnings propelled the tech giant past the $4 trillion milestone and fueled investor confidence in Big Tech’s hefty investments in artificial intelligence.

Microsoft became the second publicly traded company after Nvidia to surpass $4 trillion in market valuation, following a blockbuster earnings report.

Meta Platforms also climbed 12.1% to an all-time high in early trading, after the social media giant forecast third-quarter revenue well above estimates, thanks to AI boosting its core advertising business.

Nvidia gained more than 1%.

The S&P technology index and the communication services index both hit record highs, up 1.2% and over 3%, respectively.

At 09:50 a.m. ET, the Dow Jones Industrial Average rose 88.73 points, or 0.20%, to 44,550.01, the S&P 500 gained 45.18 points, or 0.71%, to 6,408.08 and the Nasdaq Composite gained 245.09 points, or 1.16%, to 21,374.76.

A Commerce Department report showed U.S. inflation increased in June as tariffs on imports started raising the cost of some goods, supporting economists’ expectations that price pressures would pick up in the second half of the year.

“Thursday’s PCE was stronger than expected and throws cold water on the idea of a fall rate-cut, as it’s clear that lower interest rates are not justified at this time,” said Clark Bellin, president and chief investment officer, Bellwether Wealth.

“Inflation remains sticky and justifies the Fed’s decision to keep interest rates unchanged at Wednesday’s meeting.”

Separately, weekly jobless claims increased marginally last week, suggesting the labor market remained stable.

Attention now turns to Friday’s non-farm payrolls report and a looming tariff deadline, with President Donald Trump refusing to extend trade talks for lagging partners.

Easing global trade war fears, signs of U.S. economic resilience, and renewed AI optimism have set Wall Street on course for monthly gains.

The S&P 500 and blue-chip Dow are set for a third straight monthly gain – their longest winning streak in nearly a year – while the Nasdaq was on track for its best monthly run since March 2024.

On Wednesday, Federal Reserve Chair Jerome Powell diluted investor expectations for an interest rate cut in September after the central bank kept rates unchanged.

Traders now see a 58.8% chance the Fed will stay pat in September as well, according to CME’s FedWatch tool.

Powell said it was too early to predict a September rate cut, and that current policy was not restricting the economy. The statement came after stronger-than-expected GDP data for the second quarter.

The “hold” verdict prompted another jibe on Powell by Trump, while Treasury Secretary Scott Bessent said he expected an announcement on Powell’s successor by year-end.

EU officials said European liquor could face 15% tariffs from August 1 until a different agreement is reached, with talks set to continue in the fall.

Trump’s deal with South Korea on Wednesday cut the country’s import tariff to 15% from the previously threatened 25%.

Among other stocks, Applied Digital soared 32.7% after the data center operator surpassed estimates for quarterly revenue.

Declining issues outnumbered advancers by a 1.17-to-1 ratio on the NYSE, and by a 1.16-to-1 ratio on the Nasdaq.

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(Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Devika Syamnath)