U.S. stocks rose on Friday, July 31, 2026, as strong earnings from Amazon and Microsoft drew investors back into artificial intelligence trades, despite significant volatility in the bond market and a sharp decline in Apple shares.
AI Confidence and Tech Performance
Amazon shares jumped 13.8% after the company reported quarterly earnings that exceeded Wall Street expectations, fueled by robust cloud revenue growth. According to Reuters, this represented the fastest cloud growth for the company in over four years.
Microsoft also contributed to the rally, gaining 1.8% on Friday. The company had previously forecast strong cash generation through fiscal 2027 and recorded its largest ever single-day increase in market value during the preceding trading session. Other AI-linked stocks saw gains, including Alphabet and Meta Platforms, which both rose more than 2%.
The semiconductor sector experienced solid growth driven by AI-related demand. Key movements included:
- Monolithic Power Systems: Surged 11.1% following a third-quarter revenue projection that beat analyst estimates.
- Advanced Micro Devices (AMD): Rose 6%.
- Micron Technology: Advanced 5.9%.
However, gains were tempered by Apple, whose shares fell 9.1%. Despite reporting quarterly profits that beat forecasts, the company provided a disappointing forecast indicating it was struggling to secure enough components due to supply chain strains caused by the AI-driven data-center boom.
Bond Market Volatility and Fed Outlook
While equities climbed, longer-dated Treasury yields hit new multi-year highs. The yield on the benchmark 10-year U.S. Treasury note rose to 4.739%, the highest level since January 2025. Additionally, the 30-year bond yield reached 5.2713%, the highest since mid-2007.
This surge followed comments from three Federal Reserve policymakers who dissented in favor of a rate hike. According to Reuters, these officials, including Minneapolis Fed President Neel Kashkari and Cleveland Fed President Beth Hammack, suggested the central bank might not return inflation to its 2% target due to a strengthening labor market and upside risks to price pressures. Consequently, traders are now pricing in a 69% probability of a rate increase at the Fed’s September meeting.
Global Economic Pressures and Energy
Oil prices rose on Friday, with Brent crude futures gaining 2.1% to trade at $88.68 a barrel. The increase was driven by reports that some tankers were forced to turn around in the Strait of Hormuz. Market analysts noted that the outlook is further worsened by attacks from Iran-backed Houthis on the alternative route through the Bab el-Mandeb Strait.
In currency markets, the yen strengthened 0.17% against the U.S. dollar to 159.27 per dollar. This followed Japanese authorities conducting yen-buying and dollar-selling intervention on Thursday. While the Bank of Japan kept interest rates unchanged on Friday, it signaled a resolve to increase borrowing costs.
Market Index Summary
By 9:47 a.m. ET, the primary U.S. indices showed the following movements:
| Index | Points Change | Percentage Change | Current Value |
|---|---|---|---|
| Dow Jones Industrial Average | +82.26 | +0.16% | 52,290.32 |
| S&P 500 | +10.05 | +0.12% | 7,446.54 |
| Nasdaq Composite | +86.20 | +0.34% | 25,208.37 |
Outside the U.S., South Korea’s KOSPI leapt 17.91%, marking a record comeback after heavy losses earlier in the week, though it remains approximately 30% below its all-time high.
