The S&P 500 closed higher on July 28 as gains in Boeing and Coca-Cola offset losses in chip stocks ahead of key earnings reports from major technology companies scheduled for this week. The broader market faced volatility in July amid investor concerns that firms like Apple, Microsoft, Amazon, and Alphabet may be overextending their investments in artificial intelligence (AI) data centers.
Microsoft shares rose 1.1% ahead of its earnings report on July 29, while Amazon slipped 0.2% before releasing results on July 30. Apple’s stock climbed nearly 1%, reaching $340.08 and briefly hitting a session high of $342.89, a level that lifted its market capitalization to $5 trillion for the first time. Apple is set to report its quarterly results on July 30.
The semiconductor industry, which has benefited from robust AI spending, continued to struggle. The PHLX semiconductor index fell 4.5%, extending its decline to around 25% from its record high on June 22, although it remains up 56% for the year.
Several other sectors showed strength, with the S&P 500 healthcare index rising 2.4%, consumer staples climbing 2%, and materials gaining 1.7%. However, broad tech shares pulled the overall technology index down by 1.4%.
Ross Mayfield, an investment strategy analyst at Baird in Louisville, noted that the rotation toward non-tech sectors reflects a value-driven shift amid solid economic fundamentals. “GDP is solid, the labor market continues to churn along, and in many areas, consumer spending appears to be reaccelerating,” he said.
Shares of Coca-Cola surged 5% after the company raised its annual revenue and profit outlook. Boeing’s stock jumped 4.8% following reports that the aerospace manufacturer generated positive free cash flow and made progress on its turnaround efforts.
The S&P 500 closed up 0.21% at 7,428.78 points, while the Dow Jones Industrial Average gained 1.03% to 52,747.32 points. The Nasdaq Composite fell 0.22% to 24,876.91 points.
Market participants are awaiting the Federal Reserve’s interest rate decision set for July 29. According to CME’s FedWatch tool, there is a 71% chance the central bank will hold rates steady, and a 29% chance of a 25-basis-point increase. Higher rates could weigh on AI companies that rely heavily on debt financing.
Other notable movers included Corning, whose shares tumbled 12% after third-quarter sales forecasts missed estimates, and IQVIA Holdings, which jumped 14% after raising its annual profit forecast.
Oil prices eased, with Brent crude falling 4.8% to $84.09 per barrel, on expectations of reduced geopolitical tensions following meetings between U.S. leadership and Israeli Prime Minister Benjamin Netanyahu and Ukrainian President Volodymyr Zelenskyy.
Analysts expect S&P 500 second-quarter earnings to increase by an average of 39% year-over-year, driven largely by AI-related firms, according to LSEG I/B/E/S data.
Advancing stocks outnumbered decliners on the S&P 500 by a ratio of approximately 2.5-to-1. The index recorded 63 new highs and one new low, while the Nasdaq saw 167 new highs and 207 new lows.
Trading volume on U.S. exchanges was consistent with recent activity, with 17.2 billion shares changing hands compared to the 20-day average of 17.4 billion.