U.S. equities rebounded strongly on Thursday, led by a sharp recovery in technology stocks as upbeat corporate results restored confidence in the artificial intelligence sector. A stronger-than-expected outlook from Microsoft eased concerns over the sustainability of AI-related investment, helping lift software and semiconductor shares after a period of heavy selling. The rally followed signs that technology stocks had become technically oversold, with investors taking advantage of lower valuations to re-enter the sector. However, enthusiasm remained selective, as Meta Platforms declined after reporting weaker cash flow, highlighting that elevated AI spending continues to weigh on some companies.

Economic data painted a mixed picture, with U.S. growth slowing in the second quarter while inflation showed further signs of easing, reinforcing expectations that the Federal Reserve may have greater flexibility on future policy decisions. The technology sector posted its strongest daily performance in more than a year, with semiconductor stocks also surging after strong industry updates pointed to continued robust demand for advanced chips. Overall, the session reflected renewed optimism toward AI-driven growth, although investors remain focused on balancing strong earnings momentum against a moderating economic backdrop.