Wall Street ends mixed as Amazon surges, Apple slides; ASX futures point to 1% drop on oil

U.S. stocks finished a turbulent July with a mixed session, as Amazon’s blockbuster earnings drove a sharp rally in the tech sector while Apple slumped and rising oil prices intensified inflation concerns.

The S&P 500 rose 0.7% to 7,489.72, notching its first winning week in three. The Dow Jones Industrial Average added 276 points, or 0.5%, to 52,485.03. The Nasdaq composite climbed 1% to 25,373.85 after briefly giving up an early 1.3% jump.

Despite Friday’s gains, the S&P 500 ended July with a tiny loss, capping a month of sharp swings driven by the Iran war, erratic oil prices and growing doubts about whether Big Tech’s massive artificial-intelligence investments will translate into sustainable profits.

**Amazon soars, Apple sinks**

Amazon led the market with a 15.3% surge after reporting profit for the latest quarter that more than tripled from a year earlier, well above analyst expectations. The company cited an acceleration in its cloud computing business, and analysts said the results suggest Amazon’s heavy AI spending is paying off. Amazon also raised its forecast for capital spending this year.

The reaction echoed the previous day’s move in Microsoft, which saw its best single-day gain in nearly 18 years on signals that its AI investments are also boosting profits.

On the other end of the spectrum, Apple fell 7.4% despite posting stronger-than-expected profit for the quarter. The company’s revenue forecast for the current quarter missed expectations, which executives blamed on a supply crunch in components being absorbed by the AI boom.

Chip stocks remained volatile. Micron Technology swung from an early gain of 6.4% to a loss of 6.5%, closing down 5.9%.

**Oil, inflation and bond yields**

Oil prices continued to climb as uncertainty persisted over when the Iran conflict will allow crude to flow freely from the Middle East. Brent crude rose 1.2% to settle at $US87.93 a barrel, after careening between $US72 and $US102 earlier in July.

Higher oil prices have pushed the average U.S. price for a gallon of regular gasoline to nearly $US4.11, up from $US3.85 a month ago, according to AAA. The price pressure extends to virtually every product transported by ship, plane or truck, feeding inflation fears.

The 10-year Treasury yield rose to 4.71% from 4.68% late Thursday, up sharply from 3.97% before the war with Iran sent oil prices higher. The move has pushed the average long-term U.S. mortgage rate to its highest level in a year.

Longer-term yields jumped on Wednesday after Federal Reserve Chairman Kevin Warsh repeated his commitment to returning inflation to 2% but declined to detail how he would achieve that. The Fed voted to keep its main interest rate steady at that meeting, even though inflation remains well above target.

“Without clarifying why action was or wasn’t taken already, it’s hard to see how statements about being committed to hitting its inflation target aren’t just a bluff,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

“The Fed is facing a growing credibility problem,” economists at Bank of America wrote in a report. Unless data shows less inflation pressure, “it is imperative for the Fed to pass the September test by hiking rates and delivering an internally consistent narrative.”

**ASX set to slip**

The Australian sharemarket is expected to start the week lower, with futures on Saturday pointing to a loss of 85 points, or 1%, at the open. Those futures were set before U.S. President Donald Trump said he is holding off on new strikes against Iran, after Tehran and other Middle Eastern powers told him they are working on an agreement that could quickly reopen the Strait of Hormuz.

The Australian dollar was trading at US70.55¢.

August reporting season kicks into gear this week, with News Corp and AMP among the companies set to report.

**International markets: Seoul’s wild swing**

Overseas, chip stocks drove extremes. Seoul’s Kospi index soared 17.9% for its best single-day gain in history, driven by Samsung Electronics and SK Hynix, each surging at least 26.8%. Despite the rebound, the Kospi still lost 22% in July after more than doubling in the first six months of the year.