Financial markets faced crucial tests last week as earnings reports from the country's largest tech companies sent their stocks flying in different directions. Apple's shares fell to their worst day since tariff turmoil, while Microsoft's stock posted the largest one-day market-cap gain for any U.S. company ever. Meanwhile, Amazon's cloud computing business drove accelerating sales, sending shares up 15% in Friday trading. A press conference from the new chairman of the Federal Reserve left analysts issuing notes with titles like "Doved and Confused" and "Erm… What?" The question now is whether broadening equity gains and a renewed zeal for the artificial-intelligence trade can power the rally's next leg, even as chip-stock swings and a bond-market selloff drag on major U.S. stock indexes.

The Nasdaq fell 3.2% during July, while the Dow edged higher and the S&P 500 was little changed. That modest move masked sharper moves beneath the surface, as investors re-evaluate their tech bets and grapple with rising interest rates. "Even though the top layer says things are fine, underneath there's a lot of churning and uncertainty," said Victoria Fernandez, chief market strategist at Crossmark Global Investments.