Amazon and Microsoft Earnings Boost Investor Confidence in Artificial Intelligence Spending
Wall Street staged a sharp rebound on Friday as upbeat earnings from tech giants reinforced investor confidence in artificial intelligence spending. Amazon stock surged after reporting second-quarter revenue that beat expectations, aided by the strength of its cloud-computing business. This followed a powerful rally led by Microsoft, which saw its shares jump 16% after posting stronger-than-expected Azure cloud growth. The tech-heavy Nasdaq Composite rose 0.4% as investors reacted to the continued investments of the "Magnificent Seven" companies. These four hyperscalers forecast spending between $720 billion and $745 billion cumulatively on capital projects in 2026. Despite the rebound, the 10-year Treasury yield reached its highest level since January 2025, as investors assess the Federal Reserve's decision to hold interest rates steady. Market leadership is expanding beyond the "Magnificent 7" as investors reward improving fundamentals over hype-driven momentum.