Led by Microsoft, the Nasdaq Composite rose 2.8%. The semiconductor ETF SMH jumped 6.9%, while small caps gained just 1.4%. The rebound was strong, but participation did not broaden to the same degree.

The overnight earnings test was more selective. Amazon rose about 9.6% in after-hours trading as AWS grew 37%; Apple fell about 6.3% despite a record quarter.

The U.S. Employment Cost Index is due today at 3:30 p.m. TRT, followed by Michigan consumer sentiment at 5:00 p.m. For the rally to continue, strong earnings alone will not be enough: the reclaimed levels in QQQ and SMH must hold, and long-term rates need to remain calm.

Key takeaways

  • The S&P 500 rose 1.7% to close at 7,437.63, the Dow Jones gained 1.2% to 52,208.06, and the Nasdaq Composite climbed 2.8% to 24,122.18. The Russell 2000’s 1.4% gain showed that large-cap technology leadership remained stronger than the broader market.
  • Microsoft surged 15.5% for its strongest day since 2008. QQQ, the Nasdaq 100 proxy I use, rose 3.3%, and the semiconductor ETF SMH gained 6.9%, while the software ETF IGV advanced 1.0% and the small-cap ETF IWM rose 1.4%.
  • Amazon’s revenue increased 20% to $200.6 billion, while operating income rose 43% to $27.5 billion. AWS sales grew 37% to $42.2 billion. By contrast, trailing-12-month free cash flow showed a $7.6 billion outflow under the weight of AI investment.
  • Apple reported $109.4 billion in revenue and earnings of $2.02 per share, up 16% and 29%, respectively. Gross margin reached 50.1%, but tariff reimbursements accounted for about 2 percentage points of that figure. The results were strong, but investors had priced in more.
  • The U.S. economy grew at an annualized rate of 1.5% in the second quarter, after 2.1% growth in the first quarter. The Personal Consumption Expenditures price index rose 3.7% year over year in June, while the core index increased 3.3%. On a monthly basis, headline prices fell 0.1% and core prices rose 0.1%.
  • Pressure from long-term rates did not disappear. The U.S. 10-year Treasury yield remained near 4.66%, and the 30-year yield near 5.20%. Brent crude fell 1.4% to close at $86.88; energy pressure eased, but inflation and financing costs did not ease at the same time.
  • The Bank of Japan held its policy rate at 1.00% in an 8-1 vote; the dissenting member favored 1.25%. The bank said inflation risks were tilted to the upside and that it could continue raising rates in response to economic activity, prices, and financial conditions.
  • Market commentator Tunç Şatıroğlu (@tuncsatiroglu) said he sees a roughly one-month window for gains beginning in late July, followed by the risk of a sharper decline from early September through early October. This is a seasonality and technical-analysis scenario, not a verified timetable.

What happened?

  • The index’s recovery of Wednesday’s loss matters, but leadership concentrated in a handful of large technology stocks and semiconductor companies leaves the rebound dependent on earnings. With the Russell 2000 and IGV lagging, the next test is market participation, not the index level.
  • Amazon’s reaction shows that the market is asking two separate questions about AI spending: is the investment turning into revenue, and is that conversion enough to generate cash? AWS gave a strong answer to the first question; the trailing-12-month cash outflow pushed the second into the coming quarters.
  • Apple did not report a bad quarter: iPhone grew, and the company reported double-digit growth in every geographic region. Yet the divergence was not in the company’s operations but in the expectation embedded in the stock; the tariff reimbursement’s contribution to margin prompted investors to assess the quality of the results more selectively.
  • U.S. data showed that growth is slowing while price pressure has not fallen enough to reassure the Fed. With the Bank of Japan also leaving the door open to another increase, technology stocks are drawing support from strong earnings but not yet receiving the same support from global rates.
  • Tunç Şatıroğlu’s seasonality window will gain weight today only if reclaimed supports hold and market participation broadens. Without those two confirmations, the view remains a timing hypothesis rather than a directional signal.

Market levels

Global risk and rates

  • Brent closed at $86.88. Support is at $85-$86, initial resistance at $90-$92, and $95 is the key risk threshold. Staying below $90 limits energy-driven inflation pressure; a move above $95 would reopen the main risk scenario.
  • The U.S. 10-year Treasury yield is near 4.66%, and the 30-year yield near 5.20%. Support for the 10-year yield is at 4.60%-4.65%, with resistance at 4.75%; support for the 30-year yield is at 5.10%, with resistance at 5.25%. A sustained move above 5.25% in the 30-year yield would intensify financing pressure on technology valuations.

US indices

  • The S&P 500 closed at 7,437.63. Initial support is at 7,400 and lower support at 7,350; initial resistance is at 7,450, with 7,500 as the stronger continuation threshold. Holding above 7,400 preserves the rebound; a break below 7,350 would signal renewed weakness.
  • QQQ ($QQQ), the Nasdaq 100 proxy I use, closed at $683.55. Initial support is at $680 and lower support at $675; initial resistance is at $688-$690, with $700 as the stronger continuation threshold. Holding above $680 indicates that the earlier damage has been repaired; the new upward momentum is not complete until $690 is cleared.

Themes and ETFs

  • SMH (the semiconductor ETF, $SMH) closed at $538.90. Initial support is at $535 and lower support at $520; initial resistance is at $540, with $550 as the stronger confirmation zone. Holding above $535 preserves the semiconductor rebound; a break below $520 would signal that the rally has failed.
  • IGV (the software ETF, $IGV) closed at $93.31. Initial support is at $93, lower support at $89-$90, and resistance at $94-$95. Until $95 is cleared, software cannot be said to have matched semiconductor leadership.

Crypto and precious metals

  • Bitcoin was near $64,344 at 8:19 a.m. TRT on July 31. Support is at $63,000 and lower support at $62,000; initial resistance is at $64,400, with $65,800 as the stronger confirmation level. The positive breakout is not complete without a sustained move above $64,400.
  • Ethereum was near $1,906. Support is at $1,880-$1,855, initial resistance at $1,970, and the stronger confirmation level at $2,000. The structure remains intact above $1,880; the rebound remains limited until $1,970 is cleared.
  • XRP was near $1.079. Support is at $1.065 and $1.05, initial resistance at $1.09, and the stronger confirmation level at $1.13. Tunç Şatıroğlu is also watching a move above $1.09 as a positive threshold; the current price does not yet meet that condition.
  • GLD (the gold ETF, $GLD) rose 1.6% to close at $377.16. Support is at $375.50 and $372, initial resistance at $380, and the stronger continuation zone at $385. Holding above $375.50 would show that strength persists despite pressure from long-term rates.
  • SLV (the silver ETF, $SLV) rose 3.3% to close at $53.50. Support is at $53.30 and $52.50, initial resistance at $55, and the stronger threshold at $60. Holding above $53.30 preserves the move; momentum confirmation remains limited until $55 is cleared.

Red flags

  • If the U.S. 30-year yield rises above 5.25% while Brent clears $95, financing costs and energy inflation will intensify again at the same time.
  • If the S&P 500, QQQ, and SMH break below their first supports together, at 7,400, $680, and $535 respectively, Thursday’s advance could prove to be a short-lived bounce rather than a powerful reversal.
  • If Amazon fails to hold its after-hours gain and returns to around Thursday’s close of $235.50, the positive repricing triggered by AWS growth will weaken.
  • If employment costs come in stronger than expected and the 10-year yield clears 4.75%, the support that slowing growth provides to technology valuations will be limited.

Calendar

  • July 31, 3:30 p.m. TRT: The U.S. second-quarter Employment Cost Index will be released. Persistently strong wage pressure could put upward pressure on long-term yields.
  • Before the July 31 U.S. session: Exxon Mobil, Chevron, AbbVie, and Moderna results will be in focus. Oil will be the key factor for the energy companies, while demand and outlook will matter for the healthcare companies.
  • July 31, 4:30 p.m. TRT: The U.S. cash market will open. Investors will see whether Amazon’s and Apple’s after-hours moves carry into the regular session.
  • July 31, 5:00 p.m. TRT: The University of Michigan will release its final July consumer sentiment reading. The preliminary index was 54.4; price and inflation expectations will matter for the bond market.

My analysis

My takeaway is that yesterday’s move reflected capital moving selectively in search of proof, rather than a single, uniform AI rally. The fact that companies did not move in the same direction as the index shows that investors are pricing growth, cash conversion, and earnings quality separately.

I am therefore watching for two distinct signals today. If Amazon holds its after-hours gain, company-level selectivity is continuing; if the Russell 2000 and IGV strengthen, buying is broadening across the market. If only the first occurs, the rally will remain powerful but narrow.

Long-term rates are the shared boundary for both outcomes. If employment costs push rates higher again, support from strong earnings will weaken; if rates stay calm and participation broadens, the rebound could prove more durable. My order of observation today is first rates, then opening gaps, and finally market breadth.

Sources

Not investment advice; this is a research and monitoring note.