U.S. stock markets closed higher on Friday to end a volatile week and month. Solid earnings results of some AI-driven bigwigs and a strong reading of a key consumer-centric economic data boosted market participants’ sentiment. All three major stock indexes finished in positive territory. For the last week, these indexes also ended in positive territory. However, in the last month, major indexes performed mixed.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.5% or 276.97 points to close at 52,485.03 after a choppy session. Notably, 18 components of the 30-stock index ended in positive territory and 12 ended in negative territory. At the intraday low, the blue-chip index was down nearly 211.74 points.
The tech-heavy Nasdaq Composite finished at 25,373.85, rising 1% or 251.68 points on strong performance by AI giants. At the intraday low, the tech-laden index was down 117.85 points. The S&P 500 gained 0.7% to finish at 7,489.72. However, six out of 11 sectors of the broad-market index ended in negative territory while five finished in positive territory.Â
The Information Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) gained 5.5% and 1%, respectively. On the other hand, the Communication Services Select Sector SPDR (XLC) and the Consumer Staples Select Sector SPDR (XLP) tumbled 2.7% and 2.2%, respectively.Â
The fear gauge CBOE Volatility Index (VIX) fell 6.4% to 15.99. A total of 20.6 billion shares were traded on Friday, higher than the last 20-session average of 17.1 billion. The S&P 500 recorded four new highs and four new lows. On the other hand, the Nasdaq Composite registered 52 new highs and 131 new lows.
Strong Earnings for AI-Driven Bigwigs
Amazon.com Inc. AMZN reported second-quarter 2026 adjusted earnings of $1.88 per share, beating the Zacks Consensus Estimate of $1.83 per share. Quarterly net sales of $200.6 billion, surpassed the Zacks Consensus Estimate by 1.8%. AWS’ AI computing and semiconductor businesses both exceeded a $25 billion annualized revenue run rate
Eaton Corp. plc ETNÂ posted second-quarter 2026 adjusted earnings of $3.15 per share, beating the Zacks Consensus Estimate of $3.08 per share. Quarterly net sales of $8.5 billion, surpassed the Zacks Consensus Estimate by 6.6%.Â
Consequently, stock prices of Amazon and Eaton surged 15.3% and 7.3%, respectively. Eaton currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors Ignore Higher Yield and Oil Price
The yield of the short-term 2-Year U.S. Treasury Note — considered a proxy for interest rate expectations to the Fed — rose 5.4 basis points to 4.28%. The yield on the benchmark 10-Year U.S. Treasury Note touched 4.7%, its highest level since January 2025. The yield on the long-term 30-Year U.S. Treasury Note reached 5.25%, its highest level since 2007.
Crude oil prices remained elevated due to heightened geopolitical conflicts in the Middle East. The U.S. benchmark - West Texas Intermediate crude - futures rose 1.3% to settle at $84.67 per barrel, while international benchmark - Brent crude - futures advanced 1.2% to $90.12 per barrel.
Economic Data
University of Michigan reported that the final index for the consumer sentiment index came in at 55.2% in July, ahead of the consensus estimate of 54%. The final metric for June was 49.5%. The preliminary data for July was 54.4%.
The subindex for current economic conditions climbed to 54.8% in July from 47.7% in June. The subindex for consumer expectations rose to 55.4% in July from 50.7% in June. The 1-year inflation index fell to 4.2% in July from 4.6% in June. The long-term 5-year inflation index remained flat sequentially at 3.3% in July.
The Chicago purchasing managers’ index (PMI) for the manufacturing sector came in at 57.6 in July, beating the Zacks Consensus Estimate of 55.7. The reading for June was 56.7.Â
Weekly Roundup
The last week was positive for Wall Street in contrast to a volatile July. The Dow, the S&P 500 and the Nasdaq Composite rose 1%, 1.1% and 1.6%, respectively.
Monthly Roundup
Last month was mixed for U.S. stocks as volatility erupted on Wall Street. Investors were scared that the Fed may hike the benchmark lending rate at least once this year by 25 basis points. The intensified war between the United States and Iran also aggravated the situation.
The AI-trade suffered the most due to the company’s extremely high valuations and concerns about AI hyperscalers’ ability to monetize their gigantic capex anytime soon. The S&P 500 and the Nasdaq Composite fell 0.1% and 3.2%, respectively, while the Dow managed to gain 0.3%.Â
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Â
Â
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.