The stock market ended July higher as Amazon’s surge on strong cloud revenue lifted major indexes, capping a volatile month marked by Federal Reserve uncertainty and AI spending concerns. The Nasdaq Composite rose 2.8% and the S&P 500 climbed 1.7% on July 30 after Amazon reported earnings that eased investor jitters about the company’s massive artificial intelligence investments.
Amazon Web Services, the company’s cloud division, generated $42.2 billion in revenue during the second quarter, up 37% year-over-year and beating Wall Street expectations of $40.54 billion. The figure marked AWS’s fastest growth rate in 18 quarters, according to Amazon’s earnings release. Amazon’s overall second-quarter revenue reached $200.6 billion, up 20% from the prior year.
The cloud unit’s performance proved decisive for investor confidence. Amazon shares surged nearly 14% on July 31 after the earnings announcement, becoming one of the market’s strongest performers and helping lift the broader market. The company also raised its 2026 capital expenditure forecast to $220 billion, an increase of $20 billion, signaling confidence in its infrastructure buildout despite elevated spending on AI data centers.
July had been marked by significant swings. The Federal Reserve held interest rates steady on July 29 at 3.5% to 3.75%, disappointing some investors who feared the central bank was falling behind on inflation. That decision triggered sharp declines, with the S&P 500 falling 1.52% and the Nasdaq declining 1.74% on July 29. However, the market rebounded strongly as earnings from major tech companies, led by Amazon’s cloud results, suggested the AI spending narrative was shifting from a liability to a source of genuine revenue growth.
The month’s volatility reflected broader market concerns about whether companies could justify their heavy artificial intelligence infrastructure costs with proportional returns. Strong AWS growth helped settle that debate for at least one of the market’s largest players. The Dow Jones Industrial Average finished July with modest gains, posting its fourth consecutive winning month.
Sources
- Reuters — Amazon’s Q2 cloud revenue of $42.2 billion and 37% growth rate; company raises 2026 capex to $220 billion; Amazon shares surge on cloud growth
- CNBC — Nasdaq Composite rose 2.8% and S&P 500 climbed 1.7% on July 30; Dow posts fourth straight winning month
- WSJ — AWS sales increased 37% in Q2; company raises capital spending forecast to $220 billion
- Yahoo Finance — S&P 500 and Nasdaq gains on July 31; Amazon shares surged nearly 14% on Friday
- Washington Post — S&P 500 climbed 0.7% on July 31; Nasdaq composite jumped 1%; Dow added 537.78 points
- Amazon Investor Relations — Q2 2026 net sales of $200.6 billion, up 20% YoY; AWS revenue of $42.2 billion
