Microsoft’s quarterly sales growth slowed amid sluggish corporate demand even as excitement around artificial intelligence bolstered its business. The tech titan on Tuesday said that revenue in the quarter through June, the last in its fiscal year, rose 8% to $56.2 billion, edging out analysts’ expectations. That was down from growth of 12% a year earlier. The deceleration was stark in the cloud-computing business - the engine of Microsoft’s growth for years - which recently has suffered as tech customers have pulled back spending. Revenue for its Azure and other cloud services rose 26% in the latest quarter, still rapid by many measures but sharply slower than the 40% clip a year earlier and the growth rates of 50% or more that it posted in boom times. Microsoft, among the first big tech companies to report quarterly results, has had a mixed year. Like other tech giants, it has cut staff and other costs as demand for digital services ebbing after years of red-hot growth when work and life shifted online during the pandemic. After earlier layoffs that affected some 10,000 employees, Microsoft in recent weeks laid off more than 1,000 additional employees. It is also among the companies at the forefront of a surging interest in AI services, which require significant computing power. Microsoft also has special access to some of the powerful and popular AI technology through its investment in OpenAI. Microsoft shares fell about 3% in after-hours trading following its results.

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The SMI climbed 0.5 per cent to 11,231 points. Among the 20 SMI stocks, there were 16 price gainers and 3 price losers, with 1 share closing unchanged. 18.23 (previously: 14.03) million shares were traded. Among the individual stocks, the reporting season continued to prevail. Despite markedly lower sales and EBIT, Logitech (+12.3%) viewed the first quarter of the 2023/24 financial year positively. Shares in Lindt & Sprüngli were up 0.4 per cent. SIG Group reported a rise in net profit and net sales for the second quarter, with higher prices offsetting cost inflation, and reaffirmed its growth expectations for 2023. The stock was nevertheless down 3.5 per cent. Kühne & Nagel's (+3.8%) second-quarter figures were well received. The Sulzer share advanced by 3.8 per cent. The industrial group raised its outlook for the full year, citing continued robust demand and good positioning in growth markets. UBS (+0.8 per cent) cleared a legacy of the Credit Suisse it acquired in connection with the collapsed hedge fund Archegos.

European stocks made muted moves on Tuesday, with investors focused on key central bank rate decisions due this week. The Stoxx Europe 600 index closed up 0.5% at 467.92 points. In Paris, the CAC 40 and the SBF 120 each lost 0.2%, penalized by the sharp decline in aircraft manufacturer Airbus following the announcement of an engine recall by its supplier Pratt & Whitney. The DAX 40 gained 0.1% in Frankfurt and the FTSE 100 in London climbed 0.2%. Elior (-12.2%) lowered its EBITDA margin target for the current financial year in the wake of a marked slowdown in organic sales growth in the third quarter. Airbus lost 2.5%. U.S. defense group Raytheon announced that its Pratt & Whitney subsidiary would have to issue recalls of engines powering A320neo aircraft because of a possible problem with a metal powder used in their manufacture. Rail equipment supplier Alstom lost 1.9% despite reporting higher-than-expected orders for the first quarter to the end of June, while sales more than met expectations, according to Citi. Dassault Systèmes fell by 5%. Although the software company has confirmed its targets for 2023, certain factors are likely to give cause for concern, in particular the slowdown in growth in 3D and cloud computing activities, two strategic drivers for the group, in the second quarter, note analysts at Citi. Spirits group Rémy Cointreau (+4.2%) confirmed its targets for the second half of its financial year to the end of March 2024, expecting a "strong recovery" in the second half after a first quarter weighed down by the normalization of consumer spending and a reduction in inventories in the United States. In its wake, LVMH advanced by 0.9%. Unilever (+7.4% in London) raised its forecasts for the 2023 financial year after higher-than-expected sales growth in the second quarter, with price increases offsetting a slight fall in volumes.

U.S. stocks climbed Tuesday, with a rally in 3M shares helping lift the Dow Jones Industrial Average to its 12th consecutive day of gains. On a busy day of earnings, the Dow rose roughly 27 points, or 0.1%, to 35438.07, its highest close since February 2022. The S&P 500 gained 0.3%, while the tech-heavy Nasdaq Composite climbed 0.6%. Coming earnings reports from big technology companies and the start of a two-day Federal Reserve meeting loomed over trading Tuesday. But investors still had plenty to digest as earnings rolled in. In the case of 3M, the maker of Scotch tape and Post-it Notes reported a quarterly loss due to a litigation settlement. But its shares climbed 5.3% to lead the Dow industrials, as the company posted improved margins and raised its earnings expectations for the year. Elsewhere around the market: Dow Inc. shares rose 1.8% after the chemical maker reported better-than-expected earnings. General Electric jumped 6.3% after it raised cash flow and sales targets, while its rival RTX slumped 10% after it disclosed a potential production flaw with its Pratt & Whitney jet engines.

With the US Federal Reserve's interest rate decision approaching, investors on the East Asian stock markets are mostly holding back on Wednesday. In Shanghai, the Composite Index falls by 0.3 per cent. On the Hong Kong stock exchange, the Hang Seng Index is down 0.8 per cent. The Japanese stock market is more or less treading water. The Nikkei 225 index barely changed. In Seoul, the Kospi fell by 1.2 per cent. Among individual stocks, SK Hynix lost 1.5 per cent following the presentation of financial results. The chip manufacturer closed the third quarter in a row with a loss. This also weighed on the shares of other industry players. In South Korea, Samsung Electronics fell by 2.4 per cent. Advantest lost 1.2 per cent in Tokyo and Taiwan Semiconductor Manufacturing 0.4 per cent in Taipei.

U.S. government debt yields jumped again on Tuesday, with 10- and 30-year rates finishing at two-week highs, as traders priced in a slightly greater chance that the Federal Reserve will leave interest rates higher for longer next year. The 10-year Treasury note yield rose by 3 basis points to 3.884%. The 2-year Treasury note yield also climbed 3 basis points to 4.866%.

Deutsche Bank upgrades Julius Baer target to CHF 70 (69) - Buy

CS lowers Merck target to EUR 180 (200) - Outperform

Baader cuts Temenos target to CHF 62 (64) - Sell

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