Stocks rise to end July as consumer shares lead: Friday recap

U.S. stocks closed higher on the final trading day of July, with the gains concentrated in the consumer and communication corners of the market. The S&P 500 rose 0.7% to 7,489.72. The Dow Jones Industrial Average added 0.5% to 52,485.03. The Nasdaq Composite climbed 1% to 25,373.85, led by large online and media names while chipmakers and hardware lagged. The advance was broad but uneven, and it capped a higher finish to July for the major averages.

The sector map tilted toward discretionary spending. Consumer discretionary was the day’s clear leader, up 3.3%, and communication services followed at 1.6%. Media and internet names rode much of the same wave that lifted Amazon. Energy gained 1% and industrials rose 0.8%, a sign that the strength reached past the biggest growth names. The rest of the board leaned lower. Technology and financials finished close to flat, each off less than a quarter of a percent. Consumer staples and utilities eased between half a point and three-quarters of a percent. Materials sat at the bottom, down 2.3%.

Amazon set the tone. Shares of the online retailer jumped after a second-quarter report that topped Wall Street estimates and showed accelerating growth in its cloud unit, and the rally fed straight into the consumer discretionary sector, where the company carries heavy weight. Apple pulled the other way. It fell sharply after its own results pointed to softer Services and China revenue, and that drop helped hold the technology sector near flat even as the broader Nasdaq advanced. The divide captured a theme that ran through much of the month, as investors rewarded the companies seen as gaining from heavy artificial-intelligence spending and pressured those that disappointed. Beneath the equity gains, Treasury yields pushed higher. The 10-year yield stood at 4.67% in Friday’s readings, its highest in more than a year, after the Federal Reserve chose this week to hold interest rates steady. Higher yields can weigh on richly valued shares, but on Friday the earnings response won out.

Breadth told a more cautious story beneath the headline numbers. Small caps lagged, with the Russell 2000’s tracker down 0.5% as buyers favored the largest companies. For the week, the S&P 500 and the Dow each added roughly 1%, while the small-cap gauge finished close to where it started. That gap between the megacaps and everything else has been a recurring feature of the tape this summer. Volatility stayed low. The Cboe Volatility Index fell to 15.99, a reading that reflects continued calm in the options market rather than any rush for protection.

The first week of August brings a fresh run of economic data, including updates on the labor market and factory activity. Another wave of quarterly earnings is also due, though the stretch of megacap reports that dominated the past two weeks is largely behind the market. Markets reopen Monday. Those reports will set the tone as trading resets for a new month, with the direction of interest rates and the pace of corporate spending still front of mind for investors.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.