Nasdaq 100 futures advanced 1.5%, with Microsoft shares jumping 8% before the market opened after the company reported its fastest cloud growth in four years while keeping spending under control.
Markets received a small boost from softer inflation data. The Core Personal Consumption Expenditures (PCE) Price Index for June increased 0.1%, below economists’ expectations of a 0.2% rise and down from May’s 0.3% gain.
Core PCE inflation climbed 3.3% year over year, matching forecasts but slightly lower than May’s 3.4% reading.
While the PCE index remains one of the Federal Reserve’s preferred inflation indicators, the latest figures reflect June conditions as markets move closer to August.
Other economic data showed the U.S. economy expanded at a slower pace than expected in the second quarter. Preliminary GDP figures showed annualized growth of 1.5%, below the 2.1% forecast. Initial jobless claims also increased modestly to 197,000 from 188,000 the previous week.
Despite the mixed economic signals, markets showed limited movement. Bitcoin edged higher to around $64,800, while Nasdaq futures gained 1.7% following Microsoft’s post-earnings rally.
Treasury yields moved slightly higher as investors continued evaluating the Federal Reserve’s decision to keep rates unchanged and recent remarks from Fed Chair Kevin Warsh.
Aave Considers Leaving Six Networks
Decentralized lending protocol Aave is weighing plans to shut down operations on six blockchains—Sonic, Scroll, zkSync, Metis, Soneium, and Aptos—after activity and revenue declined below the cost of maintaining those deployments.
The governance proposal covers $98.1 million in supplied assets and $15.6 million in outstanding debt across Aave. The six networks under review represent $12.8 million in supplied assets and $4.1 million in debt.
Deposits have dropped significantly across several chains, with Sonic’s liquidity falling 74% over six months to $7.6 million and Scroll’s deposits declining 86% to $2.2 million.
If approved, Aave would freeze new activity, lower supply and borrowing limits, and increase interest rates to encourage users to repay loans and withdraw funds from networks generating less than $5,000 in protocol revenue.
Bank of England Keeps Rates Steady
The Bank of England maintained its benchmark interest rate at 3.75%, pointing to a faster-than-expected decline in inflation to 2.6%.
However, policymakers warned that inflation could accelerate later this year due to higher energy costs linked to geopolitical tensions in the Middle East.
The decision passed by a 6–3 vote, with the three dissenting members supporting a move to raise rates to 4%. This marked a shift from June’s 7–2 vote split.
Rising Real Yields Pressure Risk Assets
The inflation-adjusted yield on the U.S. 30-year Treasury bond climbed close to 3%, reaching its highest level since 2008, according to Bloomberg data.
The increase means investors can earn nearly 3% above inflation from long-term government bonds, raising the opportunity cost of holding non-yielding assets such as gold and bitcoin, as well as higher-risk assets like technology stocks.
Further gains in real yields could create additional pressure on risk assets.
Dollar Weakens Despite Hawkish Fed Stance
The U.S. Dollar Index (DXY) dropped to 100.67, extending its previous decline, despite the Federal Reserve maintaining rates in what analysts described as a hawkish hold.
At the same time, uncertainty around inflation and monetary policy pushed longer-term yields higher, with the 30-year Treasury yield reaching 5.24%, its highest level since 2007.
A weaker dollar generally supports bitcoin prices, while rising yields create a competing headwind.
Bitcoin Tracks AI-Driven Market Rally
Bitcoin traded near $63,900 on Thursday, slightly lower, as U.S. stock futures gained following Microsoft’s strong earnings report.
S&P 500 futures rose 0.2%, while Nasdaq 100 futures increased 0.4%. Microsoft’s 8% premarket rally came after its cloud business posted its strongest growth in four years while keeping expenses contained.
The results provided investors with evidence that artificial intelligence spending is beginning to translate into revenue growth, unlike Alphabet’s recent increase in spending expectations that raised concerns.
Bitcoin has continued to follow movements in the AI and semiconductor sectors, showing stronger correlation with broader technology trends than with crypto-specific catalysts.
