Tech Stocks Power Wall Street Gains at End of July: Markets Wrap
(Bloomberg) — A rally in several technology heavyweights lifted stocks in the final stretch of a dizzying July as strong earnings overshadowed inflation worries that have rattled the bond market.
The S&P 500 rose almost 1%. A gauge of the Magnificent Seven megacaps jumped 3.2% as a surge in Amazon.com Inc. outweighed a slide in Apple Inc. The group of chipmakers closed little changed at the end of the worst month since 2008. Higher oil prices boosted Treasury yields, with investors also struggling to process the message from Federal Reserve Chair Kevin Warsh this week.
Despite the insatiable demand for all things related to artificial intelligence, tech firms have seen wild swings, with lofty expectations leaving little room for disappointment. At the same time, a flare-up in Middle East hostilities, a fractured central bank at home and persistent inflationary pressures have all captured Wall Street’s attention.
While the S&P 500 posted a modest gain this week, the change at the index level doesn’t come anywhere close to reflecting the massive volatility that took place underneath the surface, according to Bespoke Investment Group strategists.
“The number one question facing investors is whether the weakness in AI-exposed sectors of the market was a long-term inflection point or portfolio rebalancing,” they said. “Earnings results have been very strong once again. One wildcard, though, is seasonality.”
August is notoriously a weak month for stocks, and it only gets worse in September, Bespoke noted.
“The recent volatility looks more like a positioning event than the start of a fundamental deterioration in the AI story, though the degree of leverage in the space acts like a multiplier for the move,” said Mark Hackett at Nationwide.
Meantime, investors are shifting their focus back to macro risks. Three Fed officials who dissented against Wednesday’s decision to hold rates steady warned that waiting too long to act against inflation could risk the need for even more aggressive moves later.
“The tailwind to the dollar from resilient US economic activity is outweighed by Fed Chair Kevin Warsh failure to turn tough inflation rhetoric into a credible policy, increasing the risk the Fed falls behind the curve in containing inflation,” said Elias Haddad at Brown Brothers Harriman & Co.
Elsewhere, oil posted its biggest monthly gain since March as traders grappled with simmering global conflicts and threats to supply from the Persian Gulf to the Black Sea. President Donald Trump said he’s losing confidence in Iranian negotiators, the latest sign that the renewal of armed hostilities in the Middle East could drag on.
The yen edged up as speculation grew that Japanese authorities could step into the market again.
Corporate Highlights:
Moonshot has a computing power agreement with Alibaba Group Holding Ltd. for the use of around 20,000 Nvidia Corp. chips, underscoring China’s continued reliance on Western semiconductors to fuel its AI development, according to people with knowledge of the companies’ operations. Anthropic PBC said its AI models breached three organizations during cybersecurity tests that went awry, a little more than a week after its chief rival, OpenAI, disclosed a similar incident. ExxonMobil Holdings Corp. and Chevron Corp. plowed blowout profits into debt reduction rather than huge buyback increases, a sign of caution about how long war-driven price rallies will last. Reddit Inc. failed to announce any new data licensing agreements in its latest earnings report, disappointing investors who are hoping to see a shift in revenue streams. Roblox Corp. reported second-quarter daily active users that missed analysts’ expectations, reflecting the ongoing impact of new child-safety measures. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.7% as of 4 p.m. New York time The Nasdaq 100 rose 0.6% The Dow Jones Industrial Average rose 0.5% The MSCI World Index rose 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1527 The British pound was little changed at $1.3475 The Japanese yen rose 0.4% to 158.82 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $62,930.57 Ether fell 2.8% to $1,866.7 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.71% Germany’s 10-year yield advanced five basis points to 3.21% Britain’s 10-year yield advanced seven basis points to 5.05% Commodities
West Texas Intermediate crude rose 1.1% to $84.55 a barrel Spot gold fell 1.4% to $4,046.96 an ounce ©2026 Bloomberg L.P.
