Major U.S. stock indexes rose on Friday as a surge in Amazon.com helped offset sharp weakness in Apple. The S&P 500 closed up 0.70%, the Dow Jones Industrial Average gained 0.53%, and the Nasdaq 100 rose 0.60%, with both the S&P 500 and Nasdaq 100 reaching 1-week highs. Futures also edged higher, with September E-mini S&P 500 futures up 0.69% and September E-mini Nasdaq 100 futures up 0.59%.
Shares rallied despite a backdrop of higher bond yields following stronger U.S. economic reports and hawkish comments from the Dallas Fed. Data showed the 10-year Treasury yield rose to a 1.5-year high near 4.75%, adding pressure to equities even as investors looked to upcoming earnings results and continued strength in parts of the technology sector.
Key takeaways
- Price move: The S&P 500 rose 0.70%, the Dow gained 0.53%, and the Nasdaq 100 added 0.60% on Friday.
- Catalyst: A sharp jump in Amazon shares more than offset Apple’s decline after weaker-than-expected results and guidance.
- Rates backdrop: Higher Treasury yields—on stronger U.S. data and hawkish Fed commentary—were a headwind for broader risk sentiment.
- Growth inputs: Investors continued to focus on earnings expectations tied to AI spending and strong second-quarter results across much of the S&P 500.
- Macro watch: Markets also digested weaker economic signals from China alongside ongoing Middle East tensions affecting energy prices.
What drove the move
Friday’s rally was led by mega-cap technology, particularly Amazon. According to the report, Amazon shares jumped more than 15% after Amazon Web Services recorded the fastest quarterly revenue growth in five years in the second quarter. The company’s cloud momentum also supported optimism that projected increases in capital spending would generate adequate returns, a key point for investors assessing how AI-related infrastructure spending may translate into earnings.
That strength helped lift the broader indices even though Apple weighed on technology sentiment. The article said Apple shares fell roughly 9% after reporting disappointing service revenue and weaker revenue from China, along with a forecast that came in below expectations. Apple’s decline was cited as a negative factor for technology stocks and contributed to volatility within the Nasdaq complex.
Beyond company-specific drivers, the day’s market tone reflected shifting expectations around rates. The report attributed the pressure in equities to higher Treasury yields after the U.S. reported economic data that beat expectations and after Dallas Fed President Lorie Logan delivered hawkish comments. The report also noted that WTI crude oil rose more than 1%, which added to inflation expectations—another headwind for bonds and, by extension, equity valuations.
Market reaction: data, Fed signals, and global factors
According to the report, the U.S. economic calendar included multiple upside surprises. The Q2 employment cost index rose 0.9%, topping expectations of 0.8%. The July MNI Chicago PMI increased 0.9 to 57.6, versus expectations for a decline to 56.0. The University of Michigan’s July consumer sentiment index was also revised upward to 55.2, exceeding expectations for a downward revision to 54.0. Together, these developments contributed to the jump in bond yields.
On the policy front, the article said Logan commented that without policy restraint, inflation would likely remain above target until an unanticipated shock occurs and that modest action in the near term could reduce the probability of needing sharper action later. That framing reinforced the market’s sense that rates may need to stay restrictive for longer.
Not all macro signals were supportive. The report cited weaker-than-expected Chinese economic data, including a drop in July manufacturing PMI by 1.1 points to 49.2 and a decline in the non-manufacturing PMI by 1.2 points to 49.0, described as the weakest level in 3.5 years. Those figures were framed as a drag on global growth prospects.
In commodities, the report said WTI crude rose more than 1% even without new reported U.S.-Iran attacks overnight. The oil move was linked to ongoing Middle East risk, including statements suggesting the possibility of broader escalation and continued disruptions related to the Red Sea and Strait of Hormuz shipping routes.
What analysts and earnings expectations point to
The report highlighted earnings momentum as a supportive counterweight to rate concerns. It cited Bloomberg Intelligence forecasts indicating second-quarter earnings may rise about 23%, nearing the strength of first-quarter growth around 30%. The article said AI spending is expected to drive a large share of earnings growth in the S&P 500, with AI infrastructure stocks projected to contribute nearly 60% of S&P 500 earnings-per-share growth in the quarter.
According to Bloomberg data referenced in the report, 86% of the 291 S&P 500 companies that had reported second-quarter results had beaten estimates. That backdrop helped sustain investor focus on earnings resilience and guided the market’s ability to absorb higher yields.
The report also noted that markets were pricing a high probability of a rate hike at the next Federal Open Market Committee meeting on September 15–16, while reiterating that rates expectations remained a key swing factor for equity performance.
Notable stock moves and sector impact
Besides Amazon and Apple, the report said other mega-cap technology names participated in the rebound, with Alphabet, Microsoft, Meta Platforms, and Nvidia closing higher. Energy-related stocks gained alongside crude oil strength, with companies including APA Corp, Baker Hughes, Chevron, and Devon Energy finishing up more than 2% in some cases. The article also said cryptocurrency-exposed stocks fell as Bitcoin dropped more than 2% to a 2.5-week low, weighing on related equities.
Several individual earnings reactions stood out. Dexcom shares rose more than 10% after reporting second-quarter revenue above consensus and lifting its full-year revenue forecast. Monolithic Power Systems gained more than 8% on revenue and guidance that came in ahead of expectations. Eaton Corp Plc closed up more than 7% after reporting organic sales growth above consensus. Other companies cited in the report moved sharply in both directions following their quarterly updates, including Roblox and Reddit.
Bigger picture: rates, energy, and what to watch next
Friday’s advance underscored a market trying to balance two competing forces: improving earnings signals—especially around AI—and tightening financial conditions driven by stronger U.S. data and hawkish Fed messaging. With Treasury yields near multi-quarter highs and crude oil supported by geopolitical risk, investors are likely to remain sensitive to inflation expectations and any renewed pressure on borrowing costs.
Going into the next phase, the report points to the ongoing earnings calendar and upcoming central bank and economic milestones, including further Fed communication and additional U.S. data that could influence rate expectations ahead of subsequent market-moving decisions.
