Stocks Extend Rally Early, Led by Tech, Amazon

Published as of: July 31, 2026, 9:04 a.m. ET

(Friday market open) Stocks are extending their rally from yesterday in early trading, with major market averages poised for a weekly gain. Tech stocks are leading the charge, buttressed by Amazon (AMZN), though Apple (AAPL) is showing early losses. Both names reported earnings after Thursday's close. Meanwhile, oil prices and bond yields are moving higher as hostilities continue between the United States and Iran.

A busy week leaves investors to sort through the breadcrumbs left after dozens of earnings reports, opaque language from the rookie Fed chair, and evidence of slowing economic growth in the form of GDP estimates. Later this morning, the University of Michigan releases its final consumer sentiment reading for July. The consensus estimate is for a reading of 54.4, in line with previous results. Across the globe, the Bank of Japan left its policy rate unchanged, at 1%, as expected.

After enduring heavy selling into Wednesday's close, stocks bounced back on Thursday, thanks in part to a strong earnings-related surge in Microsoft (MSFT) shares and a rebound in many leading semiconductor names. The Dow bounced back nearly 614 points, or about 1.2%, the S&P rose 1.7%—but remains south of its 50-day moving average—and the Nasdaq rallied almost 2.8%, breaking a six-day losing streak.

1. If the market walks like a duck…: The current market has seen the S&P 500 Equal Weight Index (SPXEW) gain 6% in the last three months, the Magnificent Seven lose almost 5%, and small caps move steadily higher. It's what Kevin Gordon is calling a duck market, illustrated by relative calm on the surface and a ton of churn underneath. "Duck-like behavior is increasingly becoming the norm in the mega-cap era," noted Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR). "We continue to think that breadth statistics are more consistent with and suggestive of a rotational market—one in which leadership shifts happen more frequently and are sometimes aggressive."
    
2. AI's Grip on Washington: Expectations may be shifting around AI, in particular around whether heavy spending remains justified, but while investors reassess, new challenges are brewing on Capitol Hill. Last week, Reps. Jay Obernolte (R-CA), Lori Trahan (D-MA), and four bipartisan cosponsors formally introduced the FRONTIER Act, which would give the federal government more oversight into advanced AI models. Standing for Frontier Risk Oversight, National Transparency, Independent Evaluation, and Reporting, the bill advocates for required safety reports, transparency measures, and independent audits from the largest developers. Michael Townsend, managing director of legislative and regulatory affairs at Schwab, thinks passage is unlikely. "There are just too many differing viewpoints about what constitutes the right level of AI regulation," he said in a recent episode of Washington Wise. "Another risk is that by the time legislation makes its way through Congress, the technology may well have moved so quickly that it renders the bill ineffective." Still the timing of the bill is notable, given recent news that an autonomous OpenAI agent hacked into another AI company.
    
3. Data center investment cools: Within yesterday's GDP reading was further evidence that the AI trade is becoming a more complicated place to be. Economists track four categories of business investment—software, data centers, research and development, and computers and peripherals—to gauge how the tech buildout is impacting overall growth. Recent trends indicate that the pace of data center spending is cooling dramatically. The latest year-over-year growth reading for the category was 22.1%, still solidly positive but well off the 75.5% peak of late 2023. Computers and peripherals have seen the opposite trend, with YOY growth jumping to 60.1% from -0.1% in the fourth quarter of 2023. This contrast may indicate that the buildout has changed stages from building facilities and warehouses to installing servers and equipment. Annual growth in software and R&D held steady near 10%.

• Amazon reported earnings after the close that exceeded earnings and revenue estimates. Additionally, the company's cloud business, Amazon Web Services, announced strong revenue, as did the tech giant's AI and chips business. Ahead of the open, the shares are nearly 12% higher.
   
• Apple retreated on the heels of its earnings news, despite posting earnings and revenue numbers that topped estimates. Disappointing notes include below-expected services revenue and revenue from greater China. This morning, Apple shares have given back 7.6% ahead of the opening bell. Six of seven Mag 7 names have now reported earnings. As usual, the outlier is Nvidia (NVDA), currently scheduled to report on August 26.
   
• Microsoft (MSFT) had its best day since 2008 on Thursday, gaining 15.5% on strong earnings and a commitment to remain free cash flow positive through fiscal year 2027. In Friday pre-market action, the stock is basically flat.
   
• ExxonMobil (XOM) and Chevron (CVX) reported earnings this morning, to mixed results. Exxon fell short of estimates and is down 2% in pre-market trading, while Chevron is marginally higher after issuing numbers that were better than expected. Exxon CEO Darren Woods acknowledged that the Strait of Hormuz blockage has played a significant factor in refinery capacity, but added the quarter was "shaped by disruption, but defined by execution."
   
• Moderna (MRNA) is off 3% despite issuing second quarter earnings, revenue, and full-year guidance that topped analysts' estimates.
   
• AbbVie (ABBV) has peeled back 4% in early trading despite reporting better-than-expected earnings and revenue. The pharmaceutical company also lowered its guidance range slightly, citing the impact of a forthcoming acquisition of Apogee Therapeutics.
   
• Novo Nordisk (NVO) shares sank 9% early Friday after the company announced its late-stage heart drug, ziltivekimab, failed. In a phase 3 trail, the monoclonal antibody didn't reduce major adverse cardiovascular events versus placebo to the level the company hoped for.
   
• Coinbase (COIN) is off by more than 6% after reporting a quarterly loss that was much wider than analysts' expectations. It was the third consecutive loss for the crypto exchange. Bitcoin is slightly lower today and remains off by more than 27% in 2026.
   
• Social media company Reddit (RDDT) plunged more than 13% in early action, despite solid earnings numbers and guidance. Investors are zeroing in on CEO Steve Huffman's remarks that search referral traffic in the period was "choppy."

The 30-year U.S. Treasury has topped 5.2%, reaching the highest level since 2007 after a relatively sharp rebound from 2020 lows. 

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

August 3:  ISM Manufacturing PMI^® for July, and expected earnings from Marriott (MAR), Palantir (PLTR), Vertex Pharmaceuticals (VRTX), Williams Companies (WMB), ONEOK (OKE), and Diamondback Energy (FANG). 
August 4: Expected earnings from Caterpillar (CAT), Merck (MRK), Toyota (TM), McDonald's (MCD), Pfizer (PFE), BP (BP), Duke Energy (DUK), Cummins (CMI), Marathon Petroleum (MPC), Apollo Global Management (APO), Rockwell Automation (ROK), Space Exploration Technologies (SPCX), Advanced Micro Devices (AMD), Arista Networks (ANET), Amgen (AMGN), and Gilead Sciences (GILD).
August 5: ADP employment data for July, ISM Services PMI^® for July, and expected earnings from Eli Lilly (LLY), Walt Disney (DIS), Novo Nordisk (NVO), Shopify (SHOP), CVS (CVS), Uber (UBER), Sandisk (SNDK), Western Digital (WDC), and AppLovin (APP).
August 6: Preliminary second-quarter productivity and expected earnings from ConocoPhillips (COP), Cloudflare (NET), and Airbnb (ABNB).
August 7: June nonfarm payrolls, hourly earnings, and unemployment rate.