Amazon Soothes AI Jitters and Caps a $1.5 Trillion Week for Big Tech — But Apple's Record Plunge and a Divided Fed Keep Wall Street on Edge

Amazon's Blowout Earnings Cap a Wild, Record-Setting July

Amazon's AI Spending Vindicated as AWS Growth Hits a 4-Year High

• Amazon (AMZN) surged ▲ 15.31% to lead the S&P 500 after posting Q2 results with AWS revenue growth of 37% year-over-year — its best quarterly growth pace in more than four years — easing investor worries that the company's massive AI-infrastructure spending was outrunning returns.
• CEO Andy Jassy directly addressed the concern on the earnings call, with analysts noting that "there were worries that Amazon's spending was just moonshot spending" tied to artificial intelligence — worries Friday's results appeared to put to rest.
• The rally capped a week in which Alphabet, Amazon, and Microsoft together added nearly $1.5 trillion in combined market value, as Big Tech's biggest names used blowout cloud and AI results to answer months of investor skepticism about capital spending.
• Trading volume was unusually heavy at 20.6 billion shares, well above the 20-session average of 17.1 billion, as investors repositioned around the week's earnings-driven swings.

Apple's Record One-Day Plunge Offsets the Cloud-Driven Cheer

• Apple (AAPL) tumbled ▼ 7.4%, erasing roughly $373 billion in market value in a single session, after the iPhone maker warned of supply constraints and issued a softer-than-expected revenue outlook — even though it topped Wall Street's Q3 estimates. The drop came just a day after Apple had reclaimed its position as the world's most valuable public company above a $5 trillion valuation.
• Microsoft (MSFT) added another ▲ 3.0% Friday, building on Thursday's 15.5% surge that followed Azure cloud revenue growth of 43% year-over-year — a two-day move that added roughly $450 billion to Microsoft's market capitalization.
• Despite the rallies in Amazon and Microsoft, the technology sector as a whole slipped 0.54% on the day because Apple's decline outweighed the gains — a reminder that this week's advance was concentrated in a handful of mega-cap winners rather than the sector broadly.
• The Philadelphia Semiconductor Index inched up just 0.07% and remains down more than 20% from its June 22 record, even as chip-adjacent names like Monolithic Power Systems jumped ▲ 8.35% on a strong earnings beat.

DexCom and Monolithic Power Joined Amazon at the Top of the Leaderboard

• DexCom (DXCM) jumped ▲ 11.95% after beating Q2 estimates — EPS of $0.70 versus $0.61 expected and revenue of $1.31 billion versus $1.29 billion expected — and raising its full-year 2026 revenue outlook to a range of $5.18 billion to $5.25 billion on strong G7 15-Day sensor adoption.
• Monolithic Power Systems (MPWR) rose ▲ 8.35% after beating revenue forecasts, one of the few semiconductor names to post a strong gain in a session where the broader chip index barely moved.
• Amazon (AMZN) led all S&P 500 gainers, up ▲ 15.31%, while Microsoft (MSFT) added ▲ 3.0% on top of its Thursday surge — together the two stocks did most of the work keeping the major indexes in positive territory.
• All three major indexes finished the week higher: the S&P 500 gained about ▲ 1.0%, the Nasdaq climbed ▲ 1.6%, and the Dow rose roughly ▲ 1.0%, even after a rocky start to the week.

A Divided Fed Holds Rates as Inflation Concerns Linger

• The S&P 500 closed at 7,489.72, up ▲ 0.70% (+52.09 points), while the Nasdaq Composite gained ▲ 1.00% to 25,373.85 and the Dow Jones Industrial Average rose ▲ 0.53% to 52,485.03. The Russell 2000 was the lone decliner, slipping ▼ 0.50% to 2,931.34.
• The Federal Reserve, led by Chairman Kevin Warsh, held its benchmark rate at 3.50%–3.75% on Wednesday for a fifth straight meeting, but three voting members — Beth Hammack, Neel Kashkari, and Lorie Logan — dissented in favor of a rate hike, citing inflation still running above the Fed's 2% target.
• Moody's Analytics economist Mark Zandi defended the majority's decision to hold, noting that "when you have a supply shock like the Iran War, the textbook says don't raise rates unless inflation expectations are rising" — a reference to the oil-price spike tied to the ongoing Middle East conflict.
• The 2-year Treasury yield rose to 4.28%, and markets are now pricing a 65% probability of a Fed rate hike by September, down from 82% a week earlier, as traders weighed the hawkish dissents against signs the economy is still expanding.

Nonfarm Payrolls and AMD Earnings Headline the Week of August 3

• July's Nonfarm Payrolls report lands Friday, August 7, with consensus calling for about 88,000 jobs added and unemployment holding at 4.2% — a number that would need to land in a narrow "Goldilocks" zone to keep the Fed on hold in September without stoking recession fears.
• AMD reports second-quarter earnings after the close on Tuesday, August 4, offering the next major read-through on AI-chip demand after Amazon and Microsoft's cloud results reset expectations for the group.
• ISM Manufacturing PMI for July arrives Monday, August 3, with economists watching the "Prices Paid" component closely for signs of whether oil-driven inflation pressure tied to the Iran conflict is starting to ease.
• ADP private payrolls and the ISM Services PMI follow Wednesday, August 5, rounding out a data-heavy week that will shape how confident the Fed feels about holding rates steady at its September meeting.