Weekly Market Update for July 31, 2026

by Gavyn Jensen-Schneider, Research Associate

In a week of elevated volatility, the market marched ahead. The S&P 500 finished the week up +1.05%, while the Nasdaq rose +1.59%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.71%, up +3 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, fell -10 bps to 3.94%.

The July Federal Reserve meeting might be the most newsworthy “uneventful” meeting in recent memory. The Fed held interest rates at 3.50% – 3.75%, though the policy choice was not unanimous; three members dissented, voting in favor of a rate hike. Bond yields moved up following the lack-of-move, with the 30-year US Treasury reaching 5.2%, its highest level since 2007. The steepening yield curve reflects market uncertainty about the Fed’s path forward as, under Chairman Warsh, the Fed no longer provides forward guidance in its policy statement. The Chairman believes that short-term uncertainty from eliminating the forward-looking statement will be beneficial in the long run, as the “direct and unfiltered” reaction of the bond market will improve market efficiency and prevent the Fed from overcommitting to a certain policy direction.

The AI investment cycle was top of mind—as it has been for many months—with a swell of AI-related companies reporting their second-quarter earnings. Amazon and Microsoft saw revenue growth accelerations for their cloud computing platforms; Amazon Web Services grew +37%, its highest rate in over four years, while Microsoft Azure grew at an all-time high of +43%. Both firms’ earnings reports were received warmly by investors as the stock prices for both AMZN and MSFT jumped by +15%.

Other AI-exposed names saw a more caustic reception. Meta, the parent company of Facebook and Instagram, saw its stock fall -8% as investors fussed over its capital expenditure; the technology giant plans to spend between $130 billion and $145 billion to build out its AI data center capacity. Apple saw a similar -8% tumble post-earnings as rising component costs—particularly for memory storage—for the iPhone, iPad, and MacBook lines have resulted in price increases of $100 to $300, which may put a damper on the upcoming product release cycle.

The US economy slowed down slightly in the second quarter of the year. Thursday’s preliminary reading of Q2 GDP growth came in at 1.5%, 60 basis points slower than Q1 and Wall Street expectations. The small decline was due in part to elevated imports and a decline in government spending. Consumer spending’s contribution to economic growth increased from Q1, even as higher energy and gas prices have squeezed real incomes. June PCE inflation data was also released on Thursday, falling 40 basis points from last month to 3.7%, though core PCE remained steady at 3.3%.

The start of a new month brings a fresh set of labor market indicators: June JOLTS on Tuesday; Q2 labor productivity on Thursday; and July nonfarm payrolls and the unemployment rate on Friday. Earnings reports continue their onslaught, with a number of major healthcare and pharmaceutical companies on the docket including Eli Lilly (LLY) and Merck (MRK).

In office news, Nat was live on stage at the 8th Annual Private Wealth Great Plains Forum, held this week in Downtown Minneapolis. As part of the fixed income panel, Nat highlighted the emerging fixed income opportunities in the current interest rate environment, with active portfolio management playing a key role in navigating and capturing that value.