This content was published on
July 31, 2026 - 21:33
5 minutes
(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.In a volatile session, the S&P 500 rose almost 1%. Chipmakers climbed at the end of their worst month since 2008. Amazon.com Inc. jumped 15% on strong cloud growth. Those gains outweighed a slide in Apple Inc. 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 faced 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 seeing 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 of the year for stocks, and it only gets worse in September, they 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 climbed as 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. A Novo Nordisk A/S experimental drug failed to reduce the risk of heart attacks and strokes in a large study, a blow to the drugmaker’s growth prospects beyond obesity and diabetes. 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:StocksThe S&P 500 rose 0.8% as of 3:30 p.m. New York time The Nasdaq 100 rose 0.8% The Dow Jones Industrial Average rose 0.7% The MSCI World Index rose 0.7% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1531 The British pound rose 0.1% to $1.3483 The Japanese yen rose 0.3% to 159.05 per dollar CryptocurrenciesBitcoin fell 2.7% to $62,964.89 Ether fell 2.8% to $1,867.07 BondsThe yield on 10-year Treasuries advanced six basis points to 4.73% Germany’s 10-year yield advanced five basis points to 3.21% Britain’s 10-year yield advanced seven basis points to 5.05% CommoditiesWest Texas Intermediate crude rose 1.5% to $84.82 a barrel Spot gold fell 1.3% to $4,050.40 an ounce ©2026 Bloomberg L.P.
