Last week's trading was a study in contrasts. Treasury yields surged to levels not seen in nearly two decades—the 10-year topped 5.2% and the 30-year hit 5.5%—while odds of an October Fed rate hike rose to 66% from about 57%. Yet the tech-heavy Nasdaq led the major averages with a 2% weekly gain, the S&P 500 added 1%, and the Dow eked out a 0.3% advance after spending much of the week in negative territory.
Meta was a standout after its annual Connect conference. The company detailed plans to build an ecosystem around its Muse AI agent, including partnerships with Walmart, Best Buy, Gap, and Shopify, plus new hardware like smart glasses and an experimental Muse Charm. Revenue is expected to come from subscriptions and small fees on agent-completed transactions. Shares jumped roughly 13% for the week, approaching a $2 trillion market cap, as investors warmed to the idea that Meta's heavy AI spending can pay off beyond advertising.
Microsoft also regained credibility with Wall Street. Stifel upgraded the stock to buy, and two other firms raised price targets, citing accelerating Azure growth and confidence in AI investments. Azure revenue grew 43% in the fiscal fourth quarter, and Copilot has surpassed 30 million paid seats. Microsoft shares rose more than 4% and turned positive for the year, a notable comeback for a stock that had fallen 20% earlier in 2026. The source notes that Microsoft is "one of the few hyperscalers that is living within their means," though it maintains a hold-equivalent rating and would wait for a better entry point after the recent rally.