US Market Breakdown: Microsoft Soars as Apple Slides, Week of 27 July 2026

The busiest week of America's second-quarter reporting season delivered two opposite readings of the artificial intelligence trade, and both were extreme. Microsoft rose 15.51% on Thursday 30 July, its biggest one-day gain since 2008, adding roughly $483bn — about £360bn at Monday's rate of $1.3431 to the pound — in a single session after Azure grew 43% and passed $100bn of annual revenue for the first time. Amazon followed on Friday with a 15.4% jump of its own after cloud revenue rose 37%.

Set against that, Apple fell 7.4% on Friday to $308.91 after guiding to 9–11% revenue growth for the current quarter against a consensus nearer 12%, with chief executive Tim Cook flagging an "increasing impact" from a worldwide memory shortage. Meta Platforms dropped around 8% on Thursday after missing on earnings and lifting its capital spending guidance to $130bn–$145bn.

In between came a hawkish hold from the Federal Reserve that took 1,153.18 points off the Dow on Wednesday. All three headline indices still finished the week higher, and Monday 3 August added a record close as oil slid on news of possible US–Iran talks.

Wall Street

The week began quietly and then broke in every direction. On Monday 27 July the Dow Jones Industrial Average rose 262.83 points, or 0.51%, to 52,210.08, the S&P 500 added 0.02% to 7,413.18 and the Nasdaq Composite slipped 0.18% to 24,932.08. Tuesday was similar in shape — the Dow up 537.24 points, or 1.03%, to 52,747.32, the S&P 500 up 0.21% to 7,428.78, the Nasdaq down 0.22% to 24,876.91 — but a violent sell-off in semiconductor shares was already under way beneath it.

Wednesday brought the Federal Reserve's decision, and the reaction was brutal. The Dow fell 1,153.18 points, or 2.19%, to 51,594.14, its worst session since April 2025. The S&P 500 lost 1.52% to 7,316.15 and the Nasdaq fell 1.74% to 24,442.94, a sixth consecutive decline.

Thursday reversed almost all of it. Microsoft's results had landed after Wednesday's close, and the Nasdaq jumped 2.8% to 25,122.18 — snapping that six-day streak — while the S&P 500 gained 1.7% to 7,437.63 and the Dow rose 613.92 points, or 1.2%, to 52,208.06. Friday finished the job: the Nasdaq up 1% to 25,373.85, the S&P 500 up 0.7% to 7,489.72 and the Dow up 276.97 points, or 0.53%, to 52,485.03. Across the five sessions the S&P 500 gained roughly 1%.

The monthly picture was less flattering. The S&P 500 ended July slightly lower — its first July decline since 2014, ending eleven consecutive positive Julys. The Nasdaq fell 3.2% over the month and entered its second correction of 2026, while the Dow managed a fourth straight monthly gain. Monday 3 August then opened the new month with a broad rally: the Dow climbed 693.38 points, or 1.32%, to a record close of 53,178.41, the S&P 500 rose 1.48% to 7,600.50 and the Nasdaq gained 2.1% to 25,913.9.

The week's biggest movers

Microsoft was the week's defining move. Fiscal fourth-quarter results showed full-year revenue above $331bn and operating income up 21% to more than $155bn, but the number that mattered was Azure crossing $100bn of annual revenue with growth of 43%. The shares closed July up 24.6%.

Amazon reported quarterly net sales of $200.6bn, up 20% and above $200bn for the first time, with operating income up 43% to $27.5bn. Amazon Web Services brought in $42.2bn, up about 37% — its fastest rate in 18 quarters — against analyst expectations nearer 31%.

Apple beat on the quarter just gone and lost 7.4% anyway. The guidance, and Tim Cook's warning on memory costs, did the damage. Meta Platforms grew revenue 28% to $60.8bn but reported earnings per share of $6.18, roughly 14% below consensus, with free cash flow down to $784m as capital expenditure hit $31.1bn in the quarter alone.

GoDaddy was the week's steepest faller, down 20.2% on Friday despite beating on earnings per share at $1.83 against $1.69 expected. Full-year revenue guidance of $5.22bn–$5.26bn merely matched consensus, and investors have grown wary of generative AI eroding its website-building and domain business. Coinbase fell 14% after posting a net loss of $359.5m, or $1.36 a share, with revenue down to $1.2bn from $1.5bn a year earlier.

Caterpillar lost close to 8% on Wednesday after Baird cut its rating to Neutral, and SanDisk capped an extraordinary month: down about 47% in July as the memory sell-off hit, yet still the S&P 500's best performer of 2026 so far with a gain of 411.8%.

Company news in focus

The single largest corporate story was a financing arrangement rather than a deal. The Wall Street Journal reported that Nvidia is in talks to guarantee roughly $250bn of financing to help OpenAI lease a 10-gigawatt data centre being developed in southern Ohio by SoftBank's SB Energy. The project is expected to cost more than $500bn including chips, and Nvidia is separately said to be discussing financing OpenAI chip purchases worth up to $350bn. Terms are not final.

Healthcare dealmaking then compressed a quarter's worth of activity into Monday 3 August. KKR agreed to buy Integer Holdings for $127 a share in cash, an enterprise value of about $5.7bn. Radiopharmaceutical group Curium agreed to acquire Lantheus Holdings for $102.50 a share in cash plus contingent value rights worth up to $12.00 — a potential $114.50 a share, and up to $8bn.

The same day, the Financial Times reported that AstraZeneca had held early-stage talks about acquiring Bristol Myers Squibb in a combination valued at around $400bn — which would be the largest pharmaceutical deal ever done. AstraZeneca shares fell as much as 7.8% in London; Bristol Myers Squibb rose as much as 3.8% in US pre-market trading. Analysts quickly flagged the antitrust problem: both companies are heavyweights in oncology, competing directly in non-small-cell lung cancer.

Baird's downgrade of Caterpillar was itself a regulatory story. The broker pointed to New York's data-centre moratorium, more than 560 data-centre bills filed across US states since the start of 2025, and Gallup polling showing over 70% of American adults object to data centres near their homes. On capital returns, Phillips 66 added $10bn to its buyback authorisation on 31 July, taking capacity to $23bn, while Diamondback Energy doubled its own repurchase authorisation to $16bn. And Cracker Barrel said on Monday 27 July that chief executive Julie Masino will step down on 10 August, to be succeeded by restaurant industry veteran David Deno.

Earnings in focus

American companies report quarterly, and the late-July fortnight is when the largest of them cluster — which is why a single week can move the index this much. Beyond the megacaps, the energy majors produced the standout numbers. Exxon Mobil posted quarterly profit of $14.5bn, more than double the roughly $7.1bn a year earlier, though adjusted earnings of $3.52 a share missed estimates by eight cents. Chevron reported earnings of $12.1bn, or $6.11 a share, with adjusted earnings of $6.06 comfortably ahead of the $5.56 consensus and revenue of $70bn against expectations nearer $62bn. Upstream earnings alone came to $8.2bn as Brent averaged $104 a barrel in the quarter against $68 a year earlier. Between them the two reported $26.5bn of quarterly profit — about £19.7bn — a windfall that has already drawn comment from US lawmakers.

Apple's headline numbers were strong: revenue of $109.4bn, up 16%, earnings of $2.02 a share and iPhone revenue of $54.25bn ahead of estimates. The soft spots were services at $30.74bn against $31.22bn expected and Greater China at $18.8bn against $19.6bn.

Monday's session then closed with Palantir Technologies reporting after the bell. Revenue rose 93% to $1.94bn, US commercial revenue jumped 149% to $764m and US government revenue rose 90% to $809m. Adjusted earnings of $0.41 a share beat consensus, and full-year revenue guidance was raised to roughly $8.15bn, implying about 82% growth. The shares rose around 12% in after-hours trading; Tuesday's regular session had not opened at the time of writing.

Sectors in focus

Communication services and technology led the S&P 500 over the week, with consumer discretionary up more than 3% almost entirely on Amazon's move. Energy lagged and remains negative for the year despite the profits its constituents are reporting, and materials fell about 2%.

Semiconductors were the month's real casualty. The iShares Semiconductor ETF fell 22.1% in July, its worst month since a 23.3% drop in December 2002. The trigger was a report by The Information that Shanghai-based, state-backed Yuliangsheng had begun mass-producing home-grown immersion deep-ultraviolet lithography machines — equipment the West assumed it still controlled. Asian memory names took the brunt on Tuesday 28 July — Samsung Electronics fell 13.4% and SK Hynix 14.7% — and CNBC reported that chip stocks shed more than $1trn of value across the sell-off. In the US, Micron Technology and SanDisk both fell heavily before rebounding late in the week.

Concentration remains the defining feature of this market. CNBC calculated that Alphabet, Amazon and Microsoft added close to $1.5trn — roughly £1.1trn — of combined market value over the week. Three companies accounted for a swing larger than most national stock markets are worth in total, which is a large part of why the S&P 500 could fall over July while a majority of its constituents rose.

Macro and the Fed

The Federal Open Market Committee voted 9–3 on Wednesday 29 July to hold the federal funds rate in a range of 3.50% to 3.75%. The three dissenters — Lorie Logan of Dallas, Beth Hammack of Cleveland and Neel Kashkari of Minneapolis — all wanted a quarter-point increase, the first time since September 2016 that three policymakers dissented in the same direction. For a British reader used to the Bank of England's published vote splits the shape is familiar; the direction is not.

It was Kevin Warsh's second meeting as Fed chair. He left the shortened policy statement unchanged, restated the 2% inflation target and pointed to already-tighter financial conditions — higher nominal and real market rates — as a reason to hold. Treasuries sold off: the 10-year yield rose five basis points to 4.657% after the press conference, near its high for the year, while the more policy-sensitive two-year yield slipped four basis points to 4.236%.

Thursday's data gave both camps something. The advance estimate put second-quarter GDP growth at an annualised 1.5%, down from 2.1% in the first quarter and below forecasts nearer 1.8%. The core PCE price index rose 3.4% in the quarter, well down from 4.4% in the first — still far above target, but moving the right way. Energy is the swing factor: oil has been elevated all year on the Iran conflict and disruption around the Strait of Hormuz. That reversed on Monday, when President Trump said talks with Iran on reopening the strait would take place; September WTI futures fell more than 7% to $78.59 and October Brent dropped nearly 6% to $83.03. Gold held above $4,100 an ounce on Friday and closed out its first monthly gain in five.

Still to come

Tuesday carries a genuine first: SpaceX, which listed on the Nasdaq on 12 June at $135 a share, reports as a public company for the first time. Advanced Micro Devices reports the same day, offering a direct read on whether the chip sell-off touched the order books.

This article is for information and education only. It is not financial advice or a recommendation to buy, sell or hold any investment. Always do your own research.