The stock market closed higher Friday as Amazon’s strong earnings report and accelerating cloud growth eased investor concerns about artificial intelligence spending, lifting the S&P 500, Nasdaq, and Dow to gains.
Amazon surged over 15% after reporting second-quarter revenue of $200.6 billion and AWS cloud sales that grew 37% year-over-year, its fastest rate in 18 quarters. The company’s cloud division generated $42.2 billion in revenue, beating analyst expectations and signaling robust demand for AI infrastructure.
The broader stock market reflected the optimism. The S&P 500 rose 0.70% to close at 7,489.72 points, the Nasdaq gained 1% to 25,373.85, and the Dow Jones Industrial Average added 0.53% to reach 52,485.03, according to Reuters. Trading volume on U.S. exchanges was heavy at 20.6 billion shares, compared to an average of 17.1 billion shares over the previous 20 sessions.
Amazon’s results came on the heels of Microsoft’s strong earnings report earlier in the week, which showed Azure cloud revenue growing 43% year-over-year. Both reports helped calm market jitters about whether massive AI capital expenditures by tech giants would pay off. “There were worries that Amazon’s spending was just moonshot spending, that it’s irresponsible spending, and (CEO) Andy Jassy just put those fears to bed,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma, according to Reuters.
July had been marked by turbulence in tech stocks as investors grew anxious about the rising costs of AI infrastructure and questioned whether the spending would translate into profits. The New York Times reported that fears about ballooning AI spending by big technology companies had triggered a selloff in semiconductor and technology stocks throughout the month. Amazon and Microsoft’s earnings provided evidence that the cloud business remains robust enough to justify continued investment in AI data centers.
However, not all tech stocks benefited from Friday’s rally. Apple tumbled 7.4% after warning that supply constraints would hurt growth and raising concerns about iPhone demand, according to Reuters. The S&P 500 technology index declined 0.54% overall, kept down by Apple’s sharp losses despite gains in other tech names. Microsoft rose 3% following its earlier surge, while other semiconductor and cloud-related stocks also posted gains.
For the week, the S&P 500 rose 1.05% and the Nasdaq added 1.59%, according to Reuters. Analysts on average expect S&P 500 aggregate second-quarter earnings to soar 48% from a year ago, with AI-related stocks accounting for much of that growth.
Sources
- Reuters — Market close figures, Amazon stock surge, Microsoft gains, Apple decline, trading volume, weekly performance, earnings expectations
- Trading Economics — Confirmation of S&P 500, Nasdaq, and Dow closing figures
- Amazon Investor Relations — Q2 2026 revenue of $200.6 billion, AWS revenue of $42.2 billion, 37% AWS growth rate
- The New York Times — Context on July tech stock turbulence and AI spending concerns
