The Nasdaq Composite rose 1% on Friday as strong earnings from Amazon and Microsoft revived confidence in the AI trade, even as Apple shares sank more than 7% on a weak iPhone forecast. The gain follows one of Wall Street's roughest stretches of the year, when doubts over AI spending drove a sharp single-session drop the week before. Treasury yields also climbed to multi-year highs as Fed officials pushed publicly for a rate hike.
The Nasdaq Composite ended up 1.00% at 25,373.85 on Friday. The Dow Jones Industrial Average rose 0.53% to 52,485.74. The S&P 500 gained 0.70% to 7,489.81.
Amazon and Microsoft steady the AI trade
Strong earnings from Amazon and Microsoft drew investors back into the AI trade. Microsoft forecast strong cash generation through fiscal 2027 on Wednesday. Amazon followed a day later with its strongest cloud growth in more than four years.
Jake Dollarhide, CEO of Longbow Asset Management, said "Andy Jassy just put those fears to bed."
Apple's slide tempers the rally
Those gains were limited by a more-than-7% drop in Apple shares. A disappointing forecast showed the iPhone maker struggling to secure enough components as the AI-driven data-center boom strains global supply chains.
A rebound from a rough week
The rally follows one of Wall Street's roughest stretches of the year. The Nasdaq fell approximately 1.4% in a single session during the week of July 18-25.
The Dow dropped more than 0.75% and the S&P 500 slid roughly 1% over the same stretch, as investors grew doubtful the AI investment thesis still had runway. Nvidia and other AI chipmakers bore the brunt of that selloff. The cloud computing giants behind the AI boom issued $159 billion in bonds earlier in 2026 to finance their AI ambitions.
Treasury yields hit multi-year highs
Longer-dated Treasury yields also jumped after three Fed policymakers who had dissented in favor of a rate hike made their case publicly on Friday. The yield on benchmark 10-year notes rose 4.51 basis points to 4.708%, reaching 4.747% intraday, the highest since January 2025. Traders are now pricing in 69% odds of a rate increase at the Fed's September meeting.
Sources: Investing.com, Crypto Briefing
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