US sharemarkets finished higher on Friday as strong corporate earnings offset rising bond yields, with Amazon leading gains after another solid quarter from its cloud computing business.
The Nasdaq Composite rose 1% to 25,373.85, the S&P 500 gained 0.7% to 7,489.72 and the Dow Jones Industrial Average added 276.97 points, or 0.53%, to 52,485.03.
Amazon jumped 15% after reporting better-than-expected second-quarter revenue, supported by continued strength in its cloud business and reinforcing confidence in artificial intelligence spending. Apple moved the other way, falling more than 7% despite stronger iPhone sales, as weaker-than-expected services revenue disappointed investors.
Treasury yields continued to climb after investors questioned whether the Federal Reserve would be able to contain inflation. The 30-year Treasury yield reached its highest level since 2007, while the benchmark 10-year yield climbed above 4.7%. Oil prices also edged higher, with Brent crude rising 1.2% to US$90.12 a barrel and West Texas Intermediate adding 1.3% to US$84.67.
Despite the week’s volatility, the major indices finished higher overall. The Dow and S&P 500 each gained around 1% for the week, while the Nasdaq advanced about 1.6%.
Australian Market Outlook
Australian shares are expected to open lower despite Wall Street’s positive finish, as renewed uncertainty surrounding the Middle East overshadows strong US earnings.
S&P/ASX 200 futures are down 85 points, or 1%, to 8,858.
While investors have become more confident that heavy investment in artificial intelligence is translating into stronger earnings from major US technology companies, attention is shifting back to geopolitical risks. President Donald Trump said he had postponed planned military action against Iran to allow more time for negotiations, while reiterating that any agreement must include the reopening of the Strait of Hormuz. The Middle East conflict is expected to remain a key driver of sentiment as Australia’s reporting season begins this week.
