The final week of July was not for the faint of heart.

Treasury yields climbed to levels not seen since 2007, the Federal Reserve left investors debating whether rate hikes are becoming more distant, and Big Tech earnings redrew the line between AI winners and losers.

Warsh's 'Good Family Fight' Pushes Treasury Yields to 19-Year Highs

The Federal Reserve kept its benchmark interest rate unchanged at 3.50%–3.75%, but the decision was far from unanimous.

Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan each preferred a quarter-point hike.

It was the first time since September 2016 that three policymakers dissented in the same direction.

Fed Chair Kevin Warsh, in office less than nine weeks, declined to specify what would trigger a hike and described the split on the committee as “a good family fight.”

Warsh reaffirmed the Fed’s commitment to returning inflation to its 2% target but stopped short of signaling whether a rate hike could come as soon as September, leaving investors with more questions than answers.

The bond market did the rest. The 30-year yield rose 12 basis points to 5.21%, its highest since 2007, while the two-year yield fell four basis points. Long rates up, short rates down: traders pushed the hike further out and kept pricing the inflation problem.

The Dow Jones Industrial Average lost 1,153 points on Wednesday, its worst session in more than a year.

Then earnings took over.

Microsoft and Amazon Blast Expectations

Microsoft Corp. (MSFT) rose 15.5% on Thursday, its best session since 2008, and closed the week up 21.39% — its strongest week since October 2000.

Azure revenue passed $100 billion for the first time in fiscal 2026, up 41%, and management left calendar-year capital spending guidance unchanged at roughly $175 billion.

The stock added almost $450 billion in market value Thursday — the biggest one-day market-cap gain in corporate history.

Amazon.com Inc. (AMZN) did the opposite on spending and got the same result.

The company lifted its 2026 capital expenditure plan to about $220 billion from $200 billion, and the stock gained 16.87% on the week, its best since April 2015.

Amazon Web Services grew 36.7% year over year, the fastest pace in 18 quarters, and the backlog of signed but unbilled cloud contracts climbed to $496 billion from $364 billion in a single quarter.

Meta Platforms Inc. (META) made the point in reverse. Revenue rose 28% to $60.8 billion, but capital expenditure of $31.1 billion absorbed almost all of the $31.86 billion the business generated in operating cash flow.

Free cash flow landed at $784 million against $8.55 billion a year earlier, a 91% decline. Shares fell 8%.

Then came the company that barely spends on AI at all.

Apple Inc. (AAPL) fell roughly 8% on Friday, its worst session since 2020, after reporting record fiscal third-quarter revenue of $109.42 billion and earnings of $2.02 per share, both ahead of estimates.

The damage came from guidance: September-quarter revenue growth of 9% to 11%, down from 16% in the June quarter, squeezed by soaring DRAM and NAND prices.

Chief Executive Tim Cook, on his final earnings call before handing the company to John Ternus in September, said Apple is operating through “a 100-year flood on the memory pricing.”

July’s biggest casualty was Intel Corp. (INTC).

The chipmaker closed down 33.74%, its worst month since September 2000. Intel entered the month up roughly 270% for the year.

By week’s end, the market had delivered a clear verdict: in today’s AI race, spending billions is no longer enough. Investors increasingly want proof that those investments are already driving growth.