Recap of things that happened today:

1. $Microsoft(MSFT.US) and $Meta Platforms(META.US) both reported quarterly earnings

Microsoft:

- Revenue $90.0B (+18% YoY) vs $87.62B expected. EPS $4.74 vs $4.24 expected. But the EPS included a $3.2B gain on its Anthropic stake. That said, this is the best set of Microsoft earnings I can remember.

- Azure revenue grew 43% vs. the 40% that analysts expected, surpassing $100B for the first time. Moreover, Copilot passed 30M paid seats.

- Hyperscalers aren't supposed to accelerate at this scale, especially being FCF positive/growing heading into the coming years...

- The circularity critique got dismantled on the call: nearly 90% of cloud revenue comes from customers outside the frontier labs, and contract backlog rose 25% in Q4 excluding OpenAI.

- Crucially, Microsoft did not raise capex guidance and kept the ~$190B CY26 framework roughly intact. The market rewarded this with a +8.2% move after-hours, vs. the market punishing $Alphabet(GOOGL.US)'s increasing capex with a ~7% sell-off last week (and $Meta Platforms(META.US) below).

Meta:

- Revenue $60.80B (+28% YoY) beat the ~$60.19B consensus, but EPS was $6.18 which missed the $7.17 estimate. This was because operating costs rose ~55% on higher AI and legal/severance expenses on top of the AI ramp itself.

- Meta raised the low end of its FY2026 capex range to $130B - $145B vs prior $125B - $145B. Conversely to Microsoft who held capex flat, the markets did not enjoy this from Meta, resulting in a ~9% sell-off after hours.

- FCF was $784M in the quarter against $31.08B of capex and finance lease payments, with $83.7B of long-term debt now on the books, which is why the CFO pointed to the BlackRock El Paso JV as the template for structuring capacity off balance sheet.

- Zuckerberg cited momentum at Meta Superintelligence Labs, emphasizing continued heavy AI infra investment and plans to maximize compute capacity through 2026-2027.

- Zuckerberg also noted that Meta is seeing demand for its compute at premiums above what it paid for the capacity which is positive read through for neoclouds like $Nebius(NBIS.US) / $IREN(IREN.US) / $Coreweave(CRWV.US).

Net-net: both beat on revenue and both are spending historic sums with the difference being self-funding. Microsoft covers its buildout from their cloud business growing 43% and guided capex flat, while Meta is funding a comparable ramp from an ads business with FCF at roughly zero.

2. FOMC decision

The Fed held the federal funds target at 3.50% - 3.75% for a fifth straight meeting, but the vote was a hawkish 9-3 where three regional presidents dissented in favor of an immediate 25bp hike. This was the first time since September 2016 that three policymakers dissented with a unified view of which direction rates should head.

The statement was again pared back under Chair Kevin Warsh and noted "economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East" with inflation still above 2% partly on energy supply shocks due to the Iran war ongoing.

The overall market reaction was negative however, where stocks sold off hard into (and after) the decision, with the 10Y yield rising ~5bps to ~4.69%.

3. KOSPI sell-off

The KOSPI triggered a circuit breaker for a second straight day, which is the first back-to-back marketwide halts in the KOSPI's history.

The selling is increasingly mechanical rather than fundamental, with SK Hynix dropping as much as 17% post-earnings and closed down 9.6% despite reporting the best quarter in its history. Forced deleveraging in single-stock leveraged ETFs amplified the move.

Korea's Finance Minister, Koo Yun-cheol, apologized in parliament for introducing the products without careful consideration, with one lawmaker telling him "the country has turned into a casino".

After an emergency meetings today, authorities said measures taking effect immediately will cap single stock leveraged ETFs as a proportion of retail portfolios (a 20% ceiling is one option under discussion) and establish a legal basis for government intervention during extreme volatility.

4. CXMT IPO

While Korean memory was circuit-breaking, CXMT surged another 11% today on its third trading day post-IPO. As a result, this lifted CXMT’s market cap to approx. RMB 3.3 trillion ($487B) and making it China’s most valuable listed company. In the process, it has passed the likes of $Intel(INTC.US) ($413B) and $Cisco(CSCO.US) ($443B). Consequently, MSCI said it will add the stock to the China All Shares Index on August 10.

5. Moonshot AI Funding

Moonshot closed a larger than expected $3.5B funding round at a $35B valuation (it had targeted only $1-2B), led by China's National AI Industry Investment Fund - the state vehicle that also backs DeepSeek. ARR reached $300M in June, up from $200M in April and $100M in March, with API licensing >70% of revenue (per Tech Times). Moonshot is now seeking a follow-on at a $50B pre-money valuation ahead of a possible Hong Kong IPO this year.