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Wall Street stocks rally after Meta, Tesla earnings

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Microsoft ( MSFT ) tumbles after downbeat cloud outlook

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Dollar dips, gold nears record as traders rush to borrow

metal

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Fed keeps US rates steady, ECB cuts rates

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ECB cuts rates, euro steady

By Amanda Cooper

LONDON, Jan 30 (Reuters) - Wall Street shares rallied on

Thursday, as investors cheered earnings from Meta, but

shunned Microsoft ( MSFT ), while the dollar dipped, further

boosting gold prices.

The Federal Reserve held rates steady on Wednesday, in line

with expectations, with Fed Chair Jerome Powell saying there

would be no rush to cut them again, leaving the dollar to drift

on Thursday.

Gold often benefits from a weaker dollar and neared

record-highs as U.S. stock markets opened.

The first earnings from the group of so-called "Magnificent

Seven" megacap tech stocks met with a mixed reaction from

investors, many of whom are now scrutinising these companies' AI

spending plans in light of the emergence of low-cost Chinese

startup DeepSeek that upended equity markets this week.

"The market has been priced for perfect results from big

tech, they have also been used to big tech massively

outperforming expectations in recent years," Kathleen Brooks,

research director at XTB, said.

Microsoft ( MSFT ) beat quarterly revenue estimates, but a downbeat

outlook for its cloud computing business pushed its shares down

6%, while Meta forecast first-quarter revenue below market

estimates, but pledged to cut costs, lifting its shares by 2%.

Tesla's fourth-quarter profit margin missed

expectations, yet its shares rose 4.3%.

Apple ( AAPL ) reports results later on Thursday.

"Microsoft ( MSFT ), Tesla, and Meta are all making massive AI

investments, but investors are now demanding real results,"

Jacob Falconcrone, Saxo chief investment strategist for Europe,

said.

Data earlier in the morning showed U.S. economic growth

slowed in the fourth quarter, but remained robust enough for

investors to expect the Fed to lower rates only gradually this

year.

Gross domestic product increased at a 2.3% annualised rate

last quarter, below estimates in a Reuters poll for a rise of

2.6%, after accelerating at a 3.1% pace in the July-September

quarter, the Commerce Department's Bureau of Economic Analysis

said in its advance GDP estimate on Thursday.

President Donald Trump's policies remain a risk for the

Fed's policy outlook, and Saturday is likely to see new tariffs

slapped on Canada, Mexico and possibly China.

The European Central Bank cut interest rates as expected on

Thursday and reiterated that euro zone inflation is increasingly

under control despite concerns about global trade.

On European markets, the STOXX 600 index hit a new

record high, rising 0.7%, in a heavy earnings day that included

results from Deutsche Bank, energy producer Shell

and retailer H&M.

The euro was flat on the day at $1.042, while

sterling was up 0.1% at $1.2459.

The yen, however, strengthened about 0.8% to 154.03 per

dollar with Bank of Japan Deputy Governor Ryozo Himino

saying in a speech that the central bank will continue to raise

interest rates if the economy and prices move in line with its

forecasts.

In commodities, gold rose 1% to $2,785 an ounce,

taking advantage of the drop in the dollar.

Gold prices have risen sharply this week, partly driven by

nervousness over Trump's tariff plans and the possibility -

albeit distant - of him imposing duties on precious metals

imports.

Even though Trump has not mentioned bullion shipments in his

tariff plans, traders are racing to borrow gold from central

banks, which store the metal in London, following a surge in

deliveries to the United States, two sources familiar with the

matter said.

"Despite the fact that tariffs on gold in the States are

extremely unlikely given that it is a reserve asset, risk

managers are taking no chances and moving metal into the

States," said StoneX analyst Rhona O'Connell.

Oil prices reversed earlier losses, rising around 0.4% on

the day, leaving U.S. crude futures at $72.92 a barrel

and Brent crude at $76.85.

(Reporting by Amanda Cooper, additional reporting by Anjana

Anil in Bengaluru; Editing by Mark Potter and Emelia

Sithole-Matarise)