Wall Street largely maintained its gains on Friday despite a volatile trading session. A strong rally in Amazon shares helped offset a sharp decline in Apple, weakness in materials stocks and rising U.S. Treasury yields.
Semiconductor stocks also traded mostly higher, although price movements remained uneven throughout the session.
Wall Street Indices Move Higher
At 12:37 ET, the S&P 500 was up 0.4% at 7,469.00 points.
The technology-focused Nasdaq Composite gained 0.6% to reach 25,266.49 points. Meanwhile, the Dow Jones Industrial Average advanced 0.5% to 52,460.13 points.
The major Wall Street indices had recorded stronger gains during Thursday’s session, supported by a significant recovery in semiconductor stocks.
Microsoft Earnings Revive AI Optimism
Positive quarterly results from Microsoft renewed investor confidence in artificial intelligence spending.
Major technology companies have committed large amounts of capital to AI infrastructure, including data centres, processors and cloud-computing capacity. Investors have increasingly questioned how quickly these investments will generate sustainable returns.
Microsoft’s results offered some reassurance that strong demand for AI products and cloud services could justify the sector’s rapidly rising expenditure.
Forced Selling May Have Deepened AI Stock Declines
Reports that hedge fund Situational Awareness sold a large share of its publicly traded equity positions also attracted attention.
Analysts at Vital Knowledge said the recent disruption in AI stocks may have been caused partly by technical factors and forced selling. Therefore, the decline may not reflect a severe deterioration in the underlying performance of AI companies.
This interpretation supported the recovery in technology and semiconductor shares.
Semiconductor Stocks Record a Powerful Rebound
The Philadelphia Semiconductor Index surged 8.19% on Thursday, marking its strongest daily advance since April 2025.
The rally helped the S&P 500 deliver its best session in seven weeks.
However, Deutsche Bank analysts noted that most S&P 500 constituents still declined during the session. This indicated that the market’s gains were concentrated among a relatively small group of large companies.
Meta Platforms’ results also maintained some concerns about whether heavy AI investment will deliver sufficient returns.
Fed Decision and Inflation Data Remain in Focus
Investors continued to assess the Federal Reserve’s decision to leave interest rates unchanged on Wednesday.
Oil-price volatility linked to tensions in the Middle East added another source of uncertainty. Higher energy costs could increase inflation and reduce the Federal Reserve’s ability to lower borrowing costs.
Recent economic data showed that U.S. growth slowed during the second quarter. However, the economy remained on relatively firm ground.
Core Personal Consumption Expenditures inflation also eased in June. This index is closely followed because it is the Federal Reserve’s preferred measure of underlying inflation.
Asian and European Markets Advance
Positive market sentiment extended into Asia overnight.
Technology stocks helped lift South Korea’s KOSPI sharply, while major European equity markets also moved higher.
The global rebound followed renewed optimism surrounding technology earnings and the long-term growth potential of artificial intelligence.
Apple Shares Fall on Weak Sales Guidance
Apple shares dropped more than 9% after the company issued a disappointing forecast for its September quarter.
The iPhone maker expects sales to grow by between 9% and 11%. Analysts had predicted an increase of approximately 12%.
Apple’s gross-margin outlook also fell short of market forecasts.
The weaker guidance overshadowed the company’s recent quarterly performance and raised concerns about its ability to maintain strong growth.
Supply Problems and Chip Costs Pressure Apple
Apple continues to face supply chain difficulties that have limited its ability to satisfy demand for popular devices.
Investors are concerned that these shortages could continue during the current quarter.
Rising memory chip prices could also place additional pressure on Apple’s profitability. Higher component expenses may reduce margins unless the company raises prices or lowers costs elsewhere.
Amazon Raises Its Spending Forecast
Amazon increased its annual spending projection by $20 billion to approximately $220 billion.
The company cited higher memory chip costs as one reason for the increase. Amazon is also investing heavily in artificial intelligence infrastructure and cloud-computing capacity.
Investors have questioned whether this level of expenditure will eventually produce consistent profits and stronger cash flow.
Nevertheless, Amazon shares rallied after the company reported impressive growth at Amazon Web Services.
AWS Growth Sends Amazon Shares Surging
Amazon Web Services generated $42.2 billion in second-quarter sales, representing annual growth of 37%.
The strong result demonstrated continued demand for cloud infrastructure and AI-related services.
Amazon CEO Andy Jassy said AWS could eventually generate $1 trillion in annual revenue, although he did not provide a specific timeline.
Supported by the cloud division’s performance, Amazon shares surged more than 15%.
Investors Encouraged to Reduce Concentration Risk
Mark Haefele, chief investment officer at UBS Global Wealth Management, maintained a positive view of the long-term AI growth story.
However, he advised investors to manage concentration risk by expanding their exposure beyond a limited number of high-growth AI companies.
Defensive technology stocks may provide a more balanced way to participate in the sector while limiting exposure to sharp declines in momentum-driven names.
ExxonMobil, Chevron and AbbVie Earnings Ahead
Investors were also preparing to review quarterly results from ExxonMobil, Chevron and pharmaceutical company AbbVie.
Reports from the major oil producers were expected to provide further insight into how elevated crude prices were affecting energy-sector profits.
Overall, Wall Street remained higher as Amazon’s cloud-driven rally and strength in semiconductor stocks outweighed Apple’s sharp decline, materials-sector weakness and pressure from rising Treasury yields.
