08/03/2026
The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.70%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.60%. September E-mini S&P futures (ESU26) rose +0.69%, and September E-mini Nasdaq futures (NQU26) rose +0.59%.
Stock indices settled higher on Friday, with the S&P 500 and Nasdaq 100 posting 1-week highs. Amazon.com surged more than 15% to lead megacap technology stocks higher, which bolstered market sentiment. Amazon’s cloud unit recorded the fastest quarterly revenue growth in 5 years in Q2, reassuring investors that its projected increase in capital spending will generate sufficient returns and that the global AI buildout will be sustained. Stocks rallied on Friday despite better-than-expected US economic news and hawkish Fed comments that pushed bond yields higher. The 10-year T-note yield jumped to a 1.5-year high of 4.75% on Friday. Also, Friday’s -9% plunge in Apple was a negative factor for technology stocks after it reported disappointing service revenue and revenue from China. It also gave a weaker-than-expected revenue forecast.
Friday’s US economic news was stronger than expected. The US Q2 employment cost index rose +0.9%, stronger than expectations of +0.8%. Also, the July MNI Chicago PMI unexpectedly rose +0.9 to 57.6, stronger than expectations of a decline to 56.0. In addition, the University of Michigan US July consumer sentiment index was unexpectedly revised upward to a 5-month high of 55.2, stronger than expectations of a downward revision to 54.0.
Hawkish comments on Friday from Dallas Fed President Lorie Logan pushed bond yields higher and weighed on stocks when she said, "Without any policy restraint, inflation will likely continue to trend above target until there's an unanticipated shock. Modest action in the near term would reduce the likelihood of needing to take sharper action later."
The outlook for strong Q2 earnings, which continued this week, is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected.
US Stock Movers: The Magnificent Seven technology stocks, sans Apple, rallied on Friday to support the gains in the broader market. Amazon.com (AMZN) closed up more than +14%, Alphabet (GOOGL) closed up more than +6%, and Microsoft (MSFT), Meta Platforms (META), and Nvidia (NVDA) closed up more than +3%. In addition, Tesla (TSLA) closed up +0.76%. Roblox (RBLX) closed down more than -26% after reporting Q2 daily active users of 123 million, well below the consensus of 128.71 million. Reddit (RDDT) closed down more than -20% after reporting Q2 US daily active users of 53.2 million, below the consensus of 54 million.