Dow climbs 200 points at open as Amazon joins Microsoft in reviving AI optimism

US stocks opened higher on Friday as strong earnings from Amazon extended the market's rebound, reinforcing investor confidence in artificial intelligence spending despite ongoing geopolitical tensions in the Middle East.

The Nasdaq Composite rose 0.8%, while the S&P 500 gained 0.5%. The Dow Jones Industrial Average added 227 points, or 0.5%.

Amazon leads technology rally

Amazon jumped 11% after reporting better-than-expected second-quarter revenue, supported by continued strength in its cloud computing business.

Shares of Nvidia, AMD, and Intel were also surging. The iShares Semiconductor ETF was up around 5% in early trading on Friday.

The results followed Microsoft's strong earnings a day earlier, which sparked a broad rally in AI-linked stocks after the company reported stronger-than-expected Azure cloud growth.

Microsoft shares surged 16% on Thursday, helping lift the iShares Semiconductor ETF by more than 8%.

Apple moved in the opposite direction, falling more than 9%. Although the company reported fiscal third-quarter revenue above expectations, helped by a 22% increase in iPhone sales, weaker-than-expected services revenue weighed on investor sentiment.

The latest earnings reinforced confidence that major technology companies continue to benefit from robust demand for AI infrastructure and cloud services.

Markets recover from Wednesday's selloff

Friday's gains built on Thursday's recovery after a sharp market decline earlier in the week.

On Wednesday, the Dow suffered its worst one-day drop since April 2025, falling more than 1,100 points after the Federal Reserve left interest rates unchanged, raising concerns among investors that policymakers may be falling behind inflation.

The selloff also pushed Treasury yields higher, with the 30-year Treasury yield rising above 5.2%, near its highest level since 2007.

Despite the week's volatility, the major U.S. indexes remained on track for weekly gains. Heading into Friday's session, the Dow was up about 0.5% for the week, while the S&P 500 had gained roughly 0.4% and the Nasdaq Composite was ahead around 0.6%.

Global markets advance as oil steadies

Asian markets mostly traded higher on Friday.

South Korea's Kospi surged more than 15% as Samsung Electronics and SK Hynix rallied sharply, while Japan's Nikkei 225 climbed more than 3%.

China's CSI 300 gained 1.24%, although Hong Kong's Hang Seng Index edged 0.11% lower.

European equities also advanced, with the pan-European Stoxx 600 rising 0.8%.

Germany's DAX and France's CAC 40 each gained about 0.9%, while Britain's FTSE 100 and Italy's FTSE MIB also traded higher.

Investors also continued monitoring developments in the Middle East after Iran's military said it had launched attacks on US military bases and strategic assets in Kuwait and Bahrain following the latest US strikes.

Oil prices were mixed as signs that crude shipments through the Strait of Hormuz were recovering helped ease immediate supply concerns.

West Texas Intermediate crude traded little changed at $83.61 a barrel, while Brent crude rose 0.4% to $89.40.