The core of the difference between Microsoft and Meta's after-hours ±8% lies in capital expenditure.

Two major events last night: the Federal Reserve's interest rate decision and earnings reports from large-cap tech stocks.

First, regarding the rate decision, although rates were held steady last night. Among the 12 committee members, three already voted against maintaining the status quo. Last month, it was a unanimous 12-0, meaning this time it shifted to 9-3. Additionally, during the press conference, Waller's stance remained relatively hawkish. From a market trading perspective, in terms of interest rates, U.S. Treasury yields continued to surge after the press release, exerting a tightening effect similar to a rate hike. From this angle, liquidity in the second half of this year is unlikely to be as ample as in the first half. For assets particularly sensitive to interest rates, caution is still advised.

The second point concerns the earnings reports of two tech giants released after the bell. The post-market performance of these two tech giants' earnings was exactly opposite. Microsoft surged over 8% after hours because its capital expenditures fell short of market expectations; whereas Meta continued to raise its capital expenditure guidance, causing its stock to drop over 8% after hours. In articles from previous days, we have been emphasizing that the market has recently begun to exercise caution regarding upward revisions in capital expenditures. Today's completely divergent post-earnings performance between Microsoft and Meta further illustrates this issue.

Finally, regarding market style, recently in the U.S. stock market, sectors that are relatively equal-weighted or more defensive have performed well. For example, S&P 500 Equal Weight, healthcare, consumer staples, etc.; similarly in China, recent "old money" sectors, including Hong Kong stocks, have also performed quite well overall, indicating a clear style rotation from high-flying to low-valued stocks.

(Not intended as investment advice)

$Microsoft(MSFT.US) $Meta Platforms(META.US)