Wall Street ends higher as Amazon soothes AI jitters
The Dow Jones Industrial Average rose 280.77 points, or 0.54 per cent, to 52,488.83.
On July 31, Wall Street closed higher, propelled by Amazon's robust quarterly report and a boost in investor confidence for AI-related stocks. The tech giant's biggest quarterly revenue growth in over four years alleviated concerns about potential overspending on AI data centers. Similarly, Microsoft's strong second-quarter earnings forecasted a 15% increase, further fueling the market rally.
However, Apple experienced a decline after warning that supply constraints would negatively impact growth, raising doubts about the potential weakening of consumer demand due to recent iPhone price hikes. Despite Apple's drop, the S&P 500 technology index still gained as other tech stocks continued to perform well. The PHLX chip index also saw an increase, though it remains below its June 22 record high.
Monolithic Power Systems witnessed a rise after forecasting higher-than-expected revenue for its third quarter. Preliminary data indicated that the S&P 500 surged 51.89 points, or 0.70%, to end at 7,489.52 points, while the Nasdaq Composite gained 254.52 points, or 1.01%, to 25,376.69. The Dow Jones Industrial Average rose 280.77 points, or 0.54%, to 52,488.83.
Analysts anticipate S&P 500 aggregate second-quarter earnings to increase by 48% from the previous year, with AI-related stocks playing a significant role in this growth. The S&P 500 is currently trading at approximately 20 times expected earnings, slightly above its 10-year average of 19 times. In other news, three Federal Reserve officials who dissented at the Federal Reserve's policy meeting on July 31 called for immediate action to bring inflation down to the central bank's 2% target.
The 2-year US Treasury yield rose 5.4 basis points to 4.28% but has declined slightly for the week. Market participants are pricing in a 65% chance of a rate hike at the Fed's September meeting, a slight decrease from 82% a week ago but an increase from 63% on July 30. GoDaddy's stock dropped after narrowing its annual revenue forecast.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 2 other outlets
- Amazon enters $3 trillion club as AI optimism sweeps through Wall Street economictimes.indiatimes.com
- AMD's AI eggs are in too few baskets, Wall Street worries theregister.com
