Tech Stocks Swing Wildly as Federal Reserve Comments Spark Bond Selloff

Major U.S. technology companies experienced extreme stock volatility as investors demanded proof of returns on artificial intelligence infrastructure spending. Microsoft achieved a record one-day market-value gain of approximately $450 billion, with its stock jumping 16%. Amazon.com also saw a 15% surge, driven by reports of accelerating cloud computing sales.

Other tech giants faced declines. Apple shares fell 7.4% after the company issued a weak forecast for the September quarter, and Meta Platforms Incorporated dropped 8% following projections of negative free cash flow for the second half of the year.

Broad market instability increased after Federal Reserve Chairman Kevin Warsh gave a press conference. His suggestion that higher bond yields might replace the need for near-term interest rate increases triggered a bond selloff, pushing the 30-year U.S. Treasury yield to a 19-year high. These comments led investors to question the commitment of the Federal Reserve System to controlling inflation, even as the central bank held interest rates steady during its most recent meeting.