By Niket Nishant and Ankur Banerjee
July 30 (Reuters) - Global stocks rebounded on Thursday after U.S. inflation data for June matched expectations and Microsoft earnings eased some AI spending worries, while long-term U.S. borrowing costs rose to their highest since 2007 on doubts about the Federal Reserve's resolve in taming inflation.
A Commerce Department report showed the Personal Consumption Expenditures Price index fell 0.1% in June, compared with a 0.1% decrease expected by economists polled
by Reuters. Annually, it stood at 3.7%, in line with estimates of 3.7%.
Futures on the tech-heavy Nasdaq 100 rose 1.51%, while S&P 500 and Dow futures gained 0.60% and 0.35%, respectively.
Markets are at a delicate juncture, with steep declines in the shares of some of the biggest winners of the AI boom spooking investors. South Korea's KOSPI fell 1.23% to end its third consecutive day in the red.
Earnings from Microsoft and Meta reinforced the view that investors were looking for signs that the costly AI buildout is starting to pay off.
"We don't think the AI story is over by any means, but clearly there's scope for bumps along the way," said Sanjiv Tumkur, head of equity research at Rathbones.
Microsoft shares rose 9.02% in premarket trading after the tech major said it expects to keep generating cash through fiscal 2027. But Meta tumbled 10.2% following earnings that reflected the strain of its costly AI bets.
Microsoft had hit "the jet stream while Meta is still building the runway", Jefferies analysts wrote.
Bonds remained under pressure. The 30-year Treasury bond yield was trading around 19-year highs and was last at 5.2124%, jumping above 5.2% the day before after the Federal Reserve kept interest rates on hold even as Chair Kevin Warsh offered mixed messages on monetary policy and inflation outlook.
Traders struggled to gauge the Fed's next move - a challenge compounded by Warsh's retreat from offering forward guidance.
"The aversion from Warsh to provide forward guidance is hurting a little bit of credibility here," said Oscar Munoz, head of US economics at TD Securities.
"He's pointing to the market kind of doing the job for the Fed, but at some point there has to be some follow-through."
Europe's STOXX 600 benchmark rose 0.65%, while Britan's FTSE 100 was hovering close to a record high. The Bank of England kept interest rates unchanged on Thursday.
The MSCI All Country World Price index inched 0.25% higher after two sessions of losses.
Traders were also assessing separate data that showed U.S. economic growth slowed in the second quarter amid a widening trade deficit, but underlying strength was robust.
(Reporting by Niket Nishant in Bengaluru and Ankur Banerjee and Rae Wee in Singapore; Editing by Amanda Cooper, Mrigank Dhaniwala and Arun Koyyur)
