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(Bloomberg) — US stocks fell on Friday, erasing earlier gains that were driven by Amazon.com Inc.’s 15% share surge. The company’s stellar results had lifted a broad sweep of companies benefiting from zeal for artificial intelligence.
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However, Apple Inc.‘s 8.6% plunge, the most intraday since April 2025, pressured indexes. Component shortages weighed on the tech megacap’s sales forecast, signaling that industrywide supply constraints are taking a bigger toll than anticipated.
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The S&P 500 Index slipped 0.1% at 10:39 a.m. in New York. The tech-heavy Nasdaq 100 Index flipped between minor gains and losses. The Philadelphia Semiconductor Index, known as the SOX, gained 1%.
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Yields on 10-year Treasuries also rose 5 basis points to 4.72%, as investors’ attention returned to inflation. Federal Reserve Bank of Dallas President Lorie Logan said “inflation will likely continue to trend above target until there’s an unanticipated shock,” unless the central bank acts. Earlier, the second-quarter employment cost index, which tracks changes in wages and benefits, rose 0.9%, which was higher than expected.
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Revenue at Amazon Web Services, which generates most of Amazon’s operating profit, jumped 37%, the fastest growth since 2021. The company also boosted its 2026 capital expenditures forecast, while outlays sent free cash flow negative.
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Amazon’s share spike follows the biggest single-day gain for Microsoft Corp. since 2008. On Thursday, its strong earnings helped to propel stocks higher.
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Amazon’s results were a “Microsoft 2.0 encore,” Bernstein analyst Mark Shmulik wrote in a note. “If you like Microsoft’s print yesterday, you’re sure going to like this Amazon print.”
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Amazon also pointed to robust demand for the rest of this year and next. That echoed Samsung Electronics Co. earlier this week posting a 250-fold surge in chip profits and expecting memory shortages to worsen next year, reflecting the relentless pace of the global AI infrastructure buildout.
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Susquehanna analyst Shyam Patil expressed optimism that Amazon can generate a solid return on spending as “revenue growth begins to outpace capex growth,” he wrote in a note.
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With earnings season past the halfway mark, 86% of the 291 S&P 500 companies that have reported have beaten estimates, tracking the highest pace in five years, according to Bloomberg Intelligence.
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In other news, China’s Moonshot was said to have a computing power agreement with Alibaba Group Holding Ltd. for the use of around 20,000 Nvidia chips. Those chips were said to be from Nvidia’s earlier generation of Hopper products.
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Meanwhile, the oil-shuttling service that’s been crucial to getting cargoes out of the Strait of Hormuz has picked up again. West Texas Intermediate crude rose, trading around $86 a barrel.
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