Wall Street ended higher on Friday, lifted by Amazon as the tech heavyweight’s strong quarterly report bolstered investor confidence in AI-related stocks, while Apple dropped after its results disappointed investors. Bay Street ended lower, as gold stocks fell and Telus shares tumbled after the telecom cut its dividend.
Amazon.com surged over 15% after posting its biggest quarterly revenue growth in over four years. Its results, along with a similar report from Microsoft on Wednesday, alleviated investor concerns about potential overspending on AI data centers.
Worries that heavy investments in AI infrastructure may be taking too long to pay off rattled global markets this month and led to doubts about companies at the center of Wall Street’s rally in recent years.
“There were worries that Amazon’s spending was just moonshot spending, that it’s irresponsible spending, and (CEO) Andy Jassy just put those fears to bed,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
The PHLX chip index edged up 0.07%, and it remains down over 20% from its June 22 record high close. Apple tumbled 7.4% after warning that supply constraints would hurt growth, adding to worries that recent iPhone price hikes would weaken consumer demand.
Apple’s slump kept the S&P 500 technology index down 0.54%, despite gains in other tech stocks. Microsoft rose 3%, adding to gains after surging over 15% on Thursday in its biggest one-day percentage gain since 2008 after it forecast stronger-than-expected cloud growth.
The S&P 500 climbed 0.70% to end the session at 7,489.72 points. Even as the S&P 500 rose, declining stocks outnumbered rising ones by a 1.3-to-one ratio.
The Nasdaq gained 1% to 25,373.85 points, while the Dow Jones Industrial Average rose 0.53% to 52,485.03 points.
For the week, the S&P 500 rose 1.05% and the Nasdaq added 1.59%. The S&P 500 ended July about flat from June, while the Nasdaq fell 3.2%. Both indexes are up about 9% in 2026.
The S&P/TSX Composite index ended down 279.70 points, or 0.8%, at 35,226.14. For July, the index was up 1.1%, led by energy shares.
The materials group fell 3%. The price of gold was down 1.3% as the U.S. dollar rebounded from a more than one-month low hit in the previous session.
The telecommunications sector was also a drag, falling 3.5%. Shares of Telus tumbled 11.3% after the company reported a second-quarter loss and cut the annualized payout by 55% to focus on debt reduction.
Four of the 10 major TSX sectors ended higher, including energy. It added 0.6%, lifting its monthly gain to more than 16%. U.S. crude oil futures settled 1.3% higher at US$84.67 a barrel as reports that some tankers were forced to turn around in the Strait of Hormuz prompted traders to reassess shipping flows through the key waterway. Meanwhile, Imperial Oil, Enbridge and TC Energy all beat second-quarter profit estimates.
Elsewhere, retailer Alimentation Couche-Tard said it plans to buy Poland’s Zabka for about $8.7 billion. Shares of Couche-Tard were up 1.4%.
Preliminary data pointed to Canada’s economy growing by 3.4% in the second quarter on an annualized basis, which would be stronger than the Bank of Canada has forecast.
Industrials rose 0.5% and heavily weighted financials ended 0.2% higher.
Volume on U.S. exchanges was heavy, with 20.6 billion shares traded, compared to an average of 17.1 billion shares over the previous 20 sessions.
Analysts on average expect S&P 500 aggregate second-quarter earnings to soar 48% from a year ago, with AI-related stocks accounting for much of that growth, according to LSEG I/B/E/S.
Strong earnings forecasts and a recent decline in share prices have left the S&P 500 trading at about 20 times expected earnings, just above its 10-year average of 19 times, according to LSEG data.
The S&P 500 equal-weighted index logged its fourth straight month of gains, thanks to its limited exposure to heavyweight AI-related stocks that have underperformed for much of that time. Three Federal Reserve officials who dissented at the Fed’s policy meeting this week in favour of an interest rate hike called on Friday for immediate action to bring inflation down to the U.S. central bank’s 2% target.
The 2-year U.S. Treasury yield, which typically moves in step with interest rate expectations for the Fed, rose 5.4 basis points to 4.28% but is down slightly for the week. Markets are pricing in a 65% chance of a rate hike at the Fed’s September meeting, according to CME FedWatch, down from 82% a week ago but up slightly from 63% on Thursday.
Reuters, Globe staff