Key Highlights

● The session delivered a modest gain with narrow breadth.

● AI infrastructure names led the day's gains.

● The Fed held rates but with a hawkish tone.

● Amazon's upcoming results are the market's next big test.

The day delivered a modest gain on the surface and plenty of cross-currents underneath, as the major indexes rose in a session whose most important moves came after the close, when Big Tech earnings sent mixed signals, leaving investors with more questions than answers.

Lesson one: the rally is narrow, with the S&P 500 still below its 52-week high, and the equal-weight version of the index slipping slightly, meaning the average stock did worse than the cap-weighted benchmark.

AI Infrastructure Still Rules

The day's leadership came from AI-linked hardware, with the chip index rising for a fourth straight gain, memory stocks rallying after SK hynix's blockbuster results, and Vertiv soaring while Oracle jumped after setting a fiscal 2030 revenue target.

The Fed is on hold, but hawkish, with the central bank leaving its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbing, while rate-sensitive utilities and real estate were the worst sectors.

Big Tech Is No Longer a Monolith

After the bell, Microsoft climbed after beating estimates, with its Azure cloud business accelerating, while Alphabet slid sharply after missing on both revenue and earnings, with free cash flow turning negative and its capital spending forecast raised, a split that suggests investors are judging each company on its own merits.

The main event comes next, when Amazon reports, with its commentary on AI spending and cloud growth to be weighed against Microsoft's beat and Alphabet's miss.