US Stocks Rise to Finish Wild July as Amazon Soars, Apple Sinks and Inflation Worries Worsen

What happened

U.S. stocks rose Friday to finish a volatile July for Wall Street, with the major indices posting modest gains after a day of mixed performance. The market's move came amid heightened concerns about inflation persisting at elevated levels, driven by surging oil prices linked to escalating tensions in the Iran war.

The S&P 500 climbed 0.7%, adding 52.09 points to close at 7,489.72. The Dow Jones Industrial Average added 276 points, or 0.5%, finishing at 52,485.03. The Nasdaq composite rallied 1%, gaining 251.68 points to close at 25,373.85 after briefly losing an early 1.3% jump.

The day's action was dominated by contrasting performances from two tech giants: Amazon stock leaped 15.3%, while Apple shares fell 7.4%. Micron Technology saw its stock rise 6.4% in the morning before ultimately falling 5.9% by close, having lost 6.5% overall.

Why it matters

The market's finish to July reflects several interconnected themes that will shape investor sentiment going forward:

Oil prices and inflation concerns: Brent crude rose 1.2% to settle at $87.93 per barrel, with the price range for July spanning from a low of $72 to a high of $102 per barrel. Regular gasoline averages now stand at $4.11 per gallon, up from $3.85 a month ago. The 10-year Treasury yield climbed from 4.68% late Thursday to 4.71%, having spiked earlier in the week to 3.97% amid oil price volatility. These energy market moves directly impact inflation expectations and Federal Reserve policy considerations.

Big Tech investment questions: The market is increasingly scrutinizing whether massive investments in artificial intelligence technology by major tech companies will translate into profits. Amazon's strong performance—its profit more than tripled versus the year earlier—suggests investors are rewarding demonstrated AI monetization, while Apple's revenue miss raises questions about consumer demand for its latest products.

Market volatility: The Nasdaq composite lost 1.3% of an early rally, demonstrating how quickly sentiment can shift when macro concerns like inflation and geopolitical tensions enter the picture. This volatility pattern may persist as investors balance growth expectations against rising rates.

What to watch

Several developments will be critical in the coming weeks:

• Oil price trajectory: With Brent crude at $87.93 per barrel, any further escalation in Middle East tensions could push energy costs higher and reignite inflation concerns that may constrain Federal Reserve policy flexibility.

• Big Tech earnings season: Amazon's beat and Apple's miss set a precedent for how investors will evaluate other technology companies' AI investments and consumer demand. Expect heightened scrutiny of guidance and profit margins.

• Treasury yields: The 10-year yield at 4.71% represents a notable increase from earlier in the week. Any sustained move above this level could pressure equity valuations, particularly for growth stocks.

• Federal Reserve policy: With rates held steady, the central bank's next moves will depend heavily on incoming inflation data and energy market developments.

By the numbers

Source snapshot

Sources: AP News (https://apnews.com/article/stock-markets-rates-korea-ai-oil-e31b3a442bcb957a53f1823ef21e73e8)