Microsoft reported robust cloud growth and a boost in the number of paid artificial-intelligence subscribers, as investors remain fixated on whether the tech giant’s data-center spending will pay off. Microsoft’s revenue rose 18% to $90 billion in the quarter ended in June, a sign that the company’s AI-revenue growth is accelerating and that it will continue to spend on data centers. Net income increased 31% to $35.8 billion. The result beat Wall Street’s expectations, according to an average of dozens of analysts polled by FactSet. Shares of Microsoft, which had been down about 18% so far this year, rose 8% in after-hours trading. Microsoft said Copilot, which includes AI features embedded in its Office suite of applications, now has 30 million paid users, up from 20 million last quarter. The company’s capital expenditures reached $41 billion for the quarter, in line with its guidance last quarter. Microsoft’s fiscal year revenue was $331 billion, up 18%. Meanwhile, earlier this month Microsoft said it would cut 3,200 jobs from its Xbox videogames division as it restructures the struggling business.

The Swiss stock market closed lower halfway through the week. The SMI fell 0.6 percent to 14,486 points. Among individual stocks, Logitech recovered from earlier losses and ended the day unchanged. The technology company had announced that it might not be able to meet future demand due to an incident at a semiconductor supplier’s production facility. Adjusted for one-off effects, Logitech reported adjusted earnings of $1.85 per share for the second quarter. Meanwhile, UBS shares rose 0.9 percent. Analysts at Keefe, Bruyette & Woods cited strong second-quarter results. High customer activity led to significant net inflows in the Global Wealth Management division. However, this was tempered by weaker fee-based inflows and a decline in the number of advisors in the U.S. The investment bank performed well, as expected. The $3 billion share buyback program, set to run through the second quarter of next year, was also deemed positive. The day’s biggest loser in the SMI was Richemont, down 2.7 percent. ABB also slipped 1.5 percent. Index heavyweights Novartis and Roche dropped by as much as 1.7 percent. In contrast, Nestlé edged up 0.4 percent.

Europe
European stock markets mostly closed lower on Wednesday. The Stoxx Europe 600 index dropped 0.3% to 645.01 points. In Paris, the CAC 40 fell 0.6% to 8,408.27 points, while the SBF 120 slipped 0.5% to 6,369.57 points. In Frankfurt, the DAX 40 ended flat, and in London, the FTSE edged up 0.3%. ALTEN (+19.5%): The engineering and technology consulting group expressed greater optimism for 2026 and now anticipates organic revenue growth of 1.4% to 1.8%. Within the sector, SOPRA STERA (+13.6%) also stood out after raising its revenue growth forecast for 2026. KERING (+16.9%): The luxury group reported on Tuesday evening a smaller-than-expected quarterly decline in Gucci sales and an improvement in its current operating profitability for the first half of the year. HERMES (-11%): The luxury group published broadly stable results for the first half of the year on Wednesday, a period marked by the war in the Middle East and the negative impact of currency exchange rates. DANONE (-2.3%): The food and beverage group’s volume growth in the second quarter is considered disappointing compared to that of the British company Unilever. DEUTSCHE BANK (+1.1% in Frankfurt): The German bank announced a new share buyback plan worth half a billion euros, having recorded a sharp rise in its pre-tax profit in the second quarter, which exceeded market expectations.

United States
U.S. stocks fell sharply after the Federal Reserve left interest rates in a range between 3.5% and 3.75%, while investors worried that rate hikes were coming later this year as the war in Iran escalated. The Dow Jones Industrial Average dropped 1153.18 points, or 2.19%, to 51594.14, the biggest drop for the blue-chip gauge since April 2025. The broad S&P 500 lost 112.63 points, or 1.52%, to 7316.15. The tech-heavy Nasdaq Composite fell 433.97 points, or 1.74%, to 24442.94 , and is now down by almost 10% from its June closing record. The PHLX "SOX" Semiconductor Sector Index fell 5.3%. It was the 13th time since June 1 the index rose or fell by more than 5%, making it one of the most volatile periods for chip stocks since the bursting of the dot-com bubble in 2000. Shares of VF Corp. plunged 17% as weakness in sales of the clothing maker's Van's skatewear brand offset strength in other brands such as North Face. Procter & Gamble shares lost 1.9% after the maker of Tide laundry detergent and other household staples logged a decline in second-quarter profit. The healthcare device sub sector was a bright spot. GE HealthCare, one of the world's largest producers of magnetic resonance imaging machines, posted an increase in quarterly orders. Shares rose 12% to $71.90. Hims & Hers slid 15% to $25 after the Federal Trade Commission filed a lawsuit against the telehealth provider, accusing it of sharing customers' medical information with third-party advertisers.

Asia
Stocks in Asia are trading mixed on Thursday. The benchmark Nikkei 225 Index closed the morning session at 62,218.41, up 784.22 points or 1.28 percent, after hitting a low of 61,049.70 earlier. In the tech space, Advantest is soaring almost 13 percent, Screen Holdings is advancing almost 3 percent and Tokyo Electron is surging almost 5 percent. Elsewhere in Asia, New Zealand is down 1.5 percent, while China, Hong Kong, Singapore and Malaysia are lower by between 0.2 and 0.6 percent each. South Korea and Taiwan are surging 4.3 and 1.9 percent, respectively. Indonesia is up 0.4 percent. Crude oil prices skyrocketed on Wednesday after Iran launched surprise attacks on U.S. bases in Jordan. West Texas Intermediate crude for September delivery was up $5.55 or 7.00 percent at $84.81 per barrel.

Bonds
The U.S. Treasury market's response to the Fed's pause was mixed. The 2-year Treasury note yield declined 0.040 percentage point to 4.235%. The 10-year Treasury note yield rose 0.017 percentage point to 4.621%. The 30-year Treasury note yield added 0.046 percentage point to 5.142%. Rising long-term Treasury yields are likely to pass through to the mortgage market.

Analysis
Berenberg raises Sika target to CHF 233 (226) - Buy
SIG price target: Vontobel increases to CHF 15.50 (13.50) - Hold
Swatch rating: Kepler Cheuvreux upgrades to Buy (from Reduce) - Target CHF 225 (180)