The Fed, AI & a 1,153-Point Drop: What Just Happened?

It's the One of a Kind Financial Show Daily for Thursday, July 30th. Yesterday was one of the loudest single days I've seen in months. The Federal Reserve held rates in a 9-3 split decision. 3 regional Fed presidents dissented in favor of an interest rate hike. The Dow had its worst day since April 2025, and after the closing bell, Meta plunged while Microsoft soared. Then I went and checked what everyday people were searching for on Google yesterday as the market was deteriorating. And the answer again is telling us where the real anxiety lives. Educate, coach, plan. Never miss a moment. Let's go.

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Wednesday closed hard in the stock market. Let me give you the numbers. The Dow Jones Industrial Average was down 1,153 points or 2.19%. That's the worst single-day decline since April 2025. S&P was down 1.52%, NASDAQ Composite down 1.74%, and the 30-year Treasury yield briefly touched 5.2%. That's the highest in almost 20 years since 2007. Now, why? On Tuesday, I told you the Fed decision was coming at 2 PM Wednesday. And the market was pricing in about a 30% chance of a rate hike. What we got was even more unusual. The FOMC voted 9-3 to hold the Fed funds rate in the target range of 3.5% to 3.75%, the 5th consecutive meeting with no change. But 3 regional Fed presidents, Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas, dissented and voted for a quarter-point hike. That is the first time since 2016 that 3 FOMC voters have descended together on the same side of a policy decision. The new Fed chair, Kevin Warsh, described it at the press conference as, quote, a good family fight. Then he said something that moved the market. He argued that the recent rise in long-term Treasury yields has already tightened financial conditions on its own, so the Fed does not necessarily need to hike again right now, Because the bond market is doing part of the work for them. That is a very different framework than what we've had in years. And on inflation, he was direct. Quote, there is no soft inflation target. There is no implicit target, not under this committee's watch. There is only one target and it's 2%, end quote. Here's the plain takeaway. Tuesday, I told you the Fed decision would land in the middle of the biggest earnings week of the year, and it did. Rates and earnings are the 2 hands that make markets move, and both were open yesterday at the same time. The Dow dropped, the 30-year Treasury touched 5.2%. And I want you to remember, that is exactly why we build the one-of-a-kind financial plan around income streams that do not depend on the market being calm this week. We are not chasing returns. We are building your One of a Kind Life.

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Now, after the closing bell, the story split wide open. I was on calls with clients yesterday after 4 o'clock with the news ticker going across my screen, not believing what I was seeing. We had, you know, I've been talking about for 2 weeks about a real-world stress test. Well, here it was. Microsoft reported 4th quarter results and blew the doors off. Revenue at $90 billion, up 18% over last year, beating estimates by roughly $2.4 billion. Adjusted earnings was $4.74. That's 50 cents more than what Wall Street estimated, or 11.8%. Azure, the cloud business, grew 43% year over year, accelerating from 40% the prior quarter. For the full fiscal year, Azure crossed $100 billion in annual revenue for the first time in Microsoft's history. Microsoft 365 Copilot paid seats crossed 30 million, up from 20 million in April, a 50% increase in commercial remaining performance obligations. The contracted backlog of business Microsoft has already sold but not yet delivered jumped 84% to $678 billion. Microsoft added roughly $260 billion of market value in a single evening. And then the market opened this morning and that was realized. Meta, on the other hand, Facebook, same evening, different story. Revenue, $60.8 billion, up 28% year over year, and actually a beat on the top line. Ad revenue up 27%, but expenses grew 55% year over year to $42 billion. Operating income, the difference between what they earned and what they spent, actually fell 8%. And free cash flow collapsed from prior levels down to $784 million. And here's the number that broke it. Meta raised full year 2026, you got it, if you've been listening, capital expenditure, CapEx guidance to $130 to $145 billion. Meta's stock plunged on that news. The market is now doing exactly what I said it would 2 weeks ago on the radio show. It is splitting AI winners from AI spenders. Microsoft is showing real revenue coming out the other side of hundreds of billions of CapEx. Azure, 43% growth is the tangible answer to the question, is any of this AI spending working? Meta is showing the other side, more spending, less operating income, less free cash flow, and no clear line yet for the CapEx to revenue. Both companies are spending massive money on AI. Only one of them is currently getting paid for it. That is the split. That is what the market is now sorting out one earnings call at a time. And ooh, is there a juicy one today. After close, Apple and Amazon, $8 trillion of market cap reporting afterwards. Do not trade on this news, guys. Watch it, learn from it. Ask yourself the question that matters: Is your plan built around the noise of these earnings prints or around your paycheck, your care, and your legacy? There's only one right answer to that. We call that the one of a kind financial plan. Yesterday I did this trend. I looked at the Google Trends to see what was really. being searched for on Google, what was bringing anxiety. And I'm going to do it again today because yesterday was a horrible day in the stock market, but I want to show you what people are actually searching for. Everyday people typed these top 5 things into Google yesterday. Top of the list, Anthony Fauci invoking the Fifth Amendment at Senator Rand Paul's committee hearing yesterday, calling Paul unhinged. Ooh. COVID COVID back in the news again and topping the list. Second, Iraq armed groups condemning what they called a dangerous escalation after US and Saudi Arabia launched joint airstrikes on Iran-aligned sites inside Iraq overnight. Third, Jordan intercepting 5 Iranian ballistic missiles fired at the kingdom in the same operation. Fourth, Questions about Senator Majority Leader Mitch McConnell's health, with the Kentucky governor asking him to appear on camera. And fifth, a powerful earthquake and 100-plus aftershocks in Japan's Kumamoto region with 13 confirmed dead. Yesterday, I said the top of Google was war, weather, and worry. Today, it's broader war, Iran, Iraq, Jordan, health of a senior leader, and an earthquake. And a legal hearing about the last pandemic. Not one is a market story, and every one of them is kind of a story that shows up at the dinner table and in the phone calls from your kids and grandkids. Here's what I want to close on. When the Fed splits 9-3, when the Dow drops 1,153 points in a single session, when Meta drops billions in market value in an hour, and when there are ballistic missiles being intercepted overhead and an earthquake shaking families in Japan, And a former public health official pleading the Fifth on live television. The person watching all of that from their kitchen has one question. Am I going to be okay? That one question does not get answered by Azure growth. It doesn't get answered by— it gets answered by your one-of-a-kind financial plan in writing, on paper, clear, concise, simple to understand. Your paycheck strategy, your Social Security strategy, your tax strategy. Your long-term care strategy, your legacy strategy. That is the one-of-a-kind financial plan. That is what we build at One Oak Financial. And the noise of yesterday is exactly why it exists.

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That is the show for Thursday, July 30th. The Fed split night 3. Yesterday, Dow's worst day since April 2025. Expect an uptick today. Microsoft plus $260 billion in revenue, Meta minus a lot. Apple and Amazon tonight. You think we'll cover that tomorrow? And the family at home is watching all of it wondering, do I really need the one-of-a-kind financial plan? If you want to answer that question and get it in writing, text IDEAS, I-D-E-A-S, to 600-700 or call me directly at 757-403-5777. I'm always learning, guys. I'm here to give you what you need. Estoy aprendiendo, and so are you. Educate, coach, plan. Never miss a moment. I'll see you tomorrow. This has been the One of a Kind Financial Show Daily with your host, Mike Milligan. I am an investment advisory representative with Advisory Alpha LLC. Ideas by Mike, doing business as One of a Kind Financial, is an unaffiliated entity of Advisory Alpha LLC. This is for educational purposes only. Do not make investment decisions solely based off this podcast. Consult a licensed financial professional or call oneoakfinancial.com at 757-909-7151 and schedule your time with me or a member of our team.

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