Market Minute ⏱️ 7/31/26: Tech Earnings, AI Fund Fiasco in Focus

Mike Larson | Editor-in-Chief

Stocks are rallying further this morning after a solid day on Thursday. Crude oil is higher along with the dollar, while gold and silver are pulling back. Treasuries are under modest pressure.

Investors are focused on a mix of tech sector earnings and AI stock news today – some good, some bad. On the bullish side, South Korea’s market came roaring back due to strength in leading chip stocks. The benchmark Kospi index surged 18%, its biggest one-day rally ever. After all the recent volatility, the iShares MSCI South Korea ETF (EWY) remains 65.8% higher year-to-date.

^{EWY, AMZN, AAPL (YTD % Change)}

Amazon.com Inc. (AMZN) stock rose 11% following quarterly results that showed strong cloud computing growth. Revenue in its Amazon Web Services division rose 37% to $42.2 billion, topping the $40.6 billion forecast. The percentage gain was the largest since Q4 2021, helping to allay market worries that AI-related capex wouldn’t result in greater sales and profit.

The news wasn’t all good, though. Apple Inc. (AAPL) stock sank after the consumer tech and app company reported somewhat disappointing third-quarter results. Revenue in its services unit and China division both missed estimates, and analysts expressed concern that planned or expected price hikes on iPhones, Macs, and iPads could slow unit growth.

Meanwhile, everyone is talking about the spectacular losses suffered by Leopold Aschenbrenner. While the 20-something had no prior professional investment experience, he launched a high-powered hedge fund two years ago called “Situational Awareness” – raising money based in large part on his reputation as an AI industry “Nostradamus.”

He reportedly made heavily leveraged plays on AI and other tech stocks during the bull run, but got crushed by the recent retracement in the sector. The fund lost 67% in just a few weeks in July, according to the Wall Street Journal. That forced Aschenbrenner to sell a large chunk of its holdings to billionaire Ken Griffin’s Citadel hedge fund at a discount to raise cash.

Video Market Minute: What’s Next After Chip Volatility, AI Fund FALLOUT?

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