Stocks Finish July on a Positive Note

U.S. equities ended Friday’s session higher as investors looked beyond rising bond yields and focused on another round of corporate earnings, particularly from technology leaders.

The S&P 500 gained 0.7%, while the Nasdaq Composite advanced 1.0%. The Dow Jones Industrial Average added 277.68 points, or 0.5%, allowing the blue-chip index to post its fourth consecutive monthly gain.

Despite Friday’s rally, both the S&P 500 and Nasdaq finished July with modest monthly losses, reflecting increased volatility throughout the month.

Amazon Powers Market Higher

Amazon was the day’s standout performer, surging approximately 15% after reporting second-quarter results that exceeded Wall Street expectations.

Investor enthusiasm centered on continued strength in Amazon Web Services (AWS), reinforcing confidence that enterprise demand for cloud computing and artificial intelligence infrastructure remains robust.

The strong report added to growing optimism surrounding AI-related capital spending following Microsoft’s similarly strong earnings released earlier in the week.

Apple Slides Despite Record Revenue

Apple moved sharply lower, falling more than 9%, despite reporting record fiscal third-quarter revenue driven by strong iPhone sales.

Although revenue exceeded analyst expectations, investors were disappointed by weaker-than-anticipated services revenue and a cautious outlook. The company also warned about continuing supply constraints and higher component costs associated with memory shortages driven by AI-related demand.

The contrasting reactions between Amazon and Apple highlighted investors’ increasing focus on future growth expectations rather than historical earnings performance.

Semiconductor Stocks Continue Their Recovery

Semiconductor shares extended their rebound following Thursday’s powerful rally.

The iShares Semiconductor ETF (SOXX) gained more than 1%, supported by advances in companies including Micron Technology and Advanced Micro Devices (AMD).

The sector continued to recover after significant selling pressure earlier in the week, as investors regained confidence in long-term artificial intelligence infrastructure spending following encouraging earnings reports from major technology companies.

Treasury Yields Remain a Market Headwind

Despite equity gains, bond markets continued to signal investor concern about inflation and interest rates.

The 30-year U.S. Treasury yield climbed to approximately 5.26%, its highest level since 2007, while the benchmark 10-year Treasury yield rose above 4.7%, reaching its highest level since January 2025.

Higher yields have increased pressure on equity valuations as investors reassess expectations for future Federal Reserve policy.

Market participants have questioned whether Federal Reserve Chair Kevin Warsh will be able to return inflation to target levels amid rising energy prices and ongoing geopolitical tensions.

Geopolitical Risks Continue to Influence Markets

Investors also remained attentive to developments in the Middle East, where ongoing conflict has contributed to elevated oil prices and renewed inflation concerns.

Higher energy costs continue to complicate the inflation outlook, reinforcing uncertainty around the timing of any future interest-rate adjustments by the Federal Reserve.

While strong corporate earnings have provided support for equities, geopolitical uncertainty remains a significant source of market volatility.

Outlook

July concluded with investors balancing strong corporate earnings against persistent macroeconomic challenges. Continued strength in artificial intelligence-related spending has supported technology leaders such as Amazon and Microsoft, while rising Treasury yields, elevated oil prices, and geopolitical tensions continue to pressure broader market sentiment. As earnings season progresses and investors monitor inflation and Federal Reserve policy, markets are likely to remain sensitive to both economic data and developments in global energy markets.