Stocks began the session on Friday with uncertainty, as early gains failed to hold, but eventually closed mostly in positive territory, continuing the momentum from the previous day's strong performance. By the close, the Nasdaq was up 251.68 points, or 1 percent, the S&P 500 climbed 52.09 points, or 0.7 percent, and the Dow gained 276.97 points, or 0.5 percent. The day's upward movement came despite a late pullback from initial highs, but the overall sentiment remained bullish.
Amazon Leads Market Surge
One of the standout performers was Amazon, which jumped 15.3 percent to reach a two-month closing high. The stock's impressive rise followed the company's second-quarter results, which beat expectations and highlighted strong performance in its cloud division. Amazon's cloud subsidiary Amazon Web Services (AWS) saw sales surge by 37 percent to $42.2 billion in the second quarter. Amazon boss Andy Jassy described it as the strongest growth in 18 quarters, exceeding analysts' expectations of approximately 31 percent. Amazon's surge helped lift the broader retail sector, with the Dow Jones U.S. Retail Index rising 6.6 percent and hitting a two-month closing high.
Amazon's gains came amid heightened volatility tied to energy markets. Crude oil prices had initially spiked sharply, rising over 3 percent earlier in the day after Iran claimed responsibility for attacking two tankers passing through the Strait of Hormuz under U.S. military protection. By the close, U.S. crude oil futures had settled higher by more than 1 percent, but not without causing uncertainty in the market. The spike in oil prices drove quarterly profits for U.S. oil companies, especially ExxonMobil and Chevron to four-year highs. However, despite the rise in oil prices, Exxon shares fell by 2.3 percent, and Chevron shares remained almost unchanged.
The energy market's influence extended to other financial indicators. Treasury yields also climbed, with the ten-year yield reaching its highest point since the beginning of 2025. The rise in rates was partly driven by the oil price surge and comments from Fed officials at a recent policy meeting. Minneapolis Fed President Tushar Kashkari pointed out that inflation has been above the central bank's 2 percent goal for over five years, and he suggested that smaller, incremental rate hikes would be preferable to delaying action.
Kashkari expressed concern that waiting for inflation to decline before acting could lead to a need for more drastic measures later. "If inflation remains elevated, I believe a sequence of small adjustments would be better than waiting and then having to make a large move," he stated. He added that a gradual approach would allow for flexibility without harming the broader economy if inflation were to decline.
Cleveland Fed President Beth Hammack echoed the need for proactive action. She argued that delaying policy changes could make it harder to return inflation to the central bank's target. "The longer high inflation persists, the more difficult and costly it becomes to bring it down," Hammack said, emphasizing that the current policy framework was not restrictive enough and required a response.
In other sectors, the oil and energy space benefited from the jump in crude oil prices. The Philadelphia Oil Service Index rose 2.5 percent, and networking stocks saw gains as well, with the NYSE Arca Networking Index rising 2.2 percent. However, gold and biotechnology stocks struggled, with the NYSE Arca Biotechnology Index dropping 2.9 percent, reflecting the challenges in those sectors. Meanwhile, gaming platform Roblox shares plummeted over 27 percent after the company issued a weak forecast for the current quarter. Roblox faced criticism over its youth protection measures and introduced an age test, which made registration more difficult and limited access to revenue-generating functions.
In Europe, the market response was more mixed. The U.K.'s FTSE 100 fell 0.3 percent, but Germany's DAX and France's CAC 40 both posted modest gains.
In the bond market, U.S. Treasury prices continued to fall, extending a decline that had already begun in previous sessions. As a result, the yield on the benchmark ten-year Treasury rose to 4.745 percent, influenced by rising oil prices and the cautious stance from the Fed. The climb in yields reflected investor concerns over inflation and potential policy responses.