The final week of July was not for the faint of heart.
Treasury yields climbed to levels not seen since 2007, the Federal Reserve left investors debating whether rate hikes are becoming more distant, and Big Tech earnings redrew the line between AI winners and losers.
The Federal Reserve kept its benchmark interest rate unchanged at 3.50%–3.75%, but the decision was far from unanimous. Three policymakers voted for an immediate rate hike, exposing a growing divide within the central bank.
Fed Chair Kevin Warsh reaffirmed the Fed’s commitment to returning inflation to its 2% target but stopped short of signaling whether a rate hike could come as soon as September, leaving investors with more questions than answers.
Bond markets responded swiftly. The 30-year treasury yield climbed above 5%, its highest level since 2007, as traders questioned the Fed’s monetary strategy.
Higher yields initially fueled a broad sell-off in technology stocks. But the mood shifted dramatically after Microsoft delivered blockbuster quarterly results.
The software giant surged roughly 15% in a single session — its best daily performance since 2008 — as investors rewarded accelerating cloud growth and stronger-than-expected AI demand.
The rally reignited enthusiasm across the broader AI trade, helping erase much of the week’s earlier losses in the Nasdaq.
The market rewarded a similar story at Amazon. Shares jumped 15% on Friday morning after AWS posted its strongest growth in years, reinforcing the view that heavy AI infrastructure spending is beginning to generate tangible returns rather than simply inflate capital expenditures.
Not every tech giant passed Wall Street’s test.
Meta Platforms fell 8% despite another solid quarter, as investors focused on another sharp increase in AI spending and weaker free cash flow.
Meanwhile, Apple tumbled over 9% on the morning of July 31, suffering its worst session since 2020 after disappointing investors with weaker margins and mounting concerns over supply chain disruptions. Apple stock wiped out over $450 billion in a single day.
Chief Executive Tim Cook described the disruption triggered by rising memory costs as a “100-year flood.”
Outside of big tech, Ford Motor Co. also disappointed. The automaker warned that tariffs would weigh more heavily on profits than previously expected,
By week’s end, the market had delivered a clear verdict: In today’s AI race, spending billions is no longer enough. Investors increasingly want proof that those investments are already driving growth.Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Fed’s Warsh spurs bond market fear, plus what moved markets this week
Reporting by Benzinga / Detroit Free Press
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By Benzinga | USA TODAY Network
