Microsoft Hits $4 Trillion Valuation Amid Market Rally

Driven by sustained investor confidence in artificial intelligence, Microsoft's market capitalization recently surpassed $4 trillion, making it the second company to reach this milestone, following Nvidia. This achievement coincided with a 5.3% increase in its stock price after the company announced a quarterly profit of $27.2 billion, which was largely attributed to its substantial AI investments.

The broader market also saw gains, with the Nasdaq Composite, S&P 500, and other major indexes all trading at or above previous all-time closing highs. This positive market sentiment was buoyed by President Donald Trump's announcement of a new trade agreement with South Korea, which includes a 15% tariff on imports. Investors viewed the deal as a positive resolution to a period of trade uncertainty with a key economic partner.

These market gains occurred despite data indicating rising inflationary pressures, as the personal consumption expenditures (PCE) price index for June 2025 rose to 2.6% year-over-year, up from 2.4% in May. Additionally, other technology companies reported strong results, with Meta's stock surging 12.5% after reporting a quarterly profit of $18.3 billion, fueled by a robust advertising business and increased focus on AI.