U.S. markets enter Monday, August 3, 2026, with conditions set by the Friday, July 31 close.

Stocks finished July with a strong rebound. AI confidence improved. The Nasdaq led. The S&P 500 moved higher. The Dow gained. Small caps weakened. Microsoft and Amazon boosted confidence. Apple pressured parts of technology. Oil remained elevated. Treasury yields stayed high. Investors moved into August watching earnings and rates.

The S&P 500 closed at 7,489.72.
The Nasdaq closed at 25,373.85.
The Dow closed at 52,485.03.
The Russell 2000 closed at 2,931.34.

The surface improved. The internal picture was mixed. Investors returned to AI leaders, but higher rates continued limiting how far the rally could expand.

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Friday’s session showed strength across large-cap stocks.

The Nasdaq rose +1.0%.
The S&P 500 rose +0.7%.
The Dow gained +0.5%.
The Russell 2000 fell -0.5%.

That ranked the major indexes from strongest to weakest as:
Nasdaq, S&P 500, Dow, Russell 2000.
The Nasdaq gained 251.67 points.
The S&P 500 gained 52.09 points.
The Dow gained 276.97 points.
The Russell 2000 lost 14.76 points.

The strongest signal came from technology. Microsoft and Amazon helped rebuild confidence in AI spending. That mattered because investors spent the prior week questioning whether AI investment could create enough profits. Friday gave investors a better answer.

The message changed:

The index finished July higher as buyers returned to technology. The S&P 500 also improved. The index ended the month near elevated levels despite heavy volatility. The Dow continued showing strength. Large companies remained supported as investors looked for stability. Small caps weakened. The Russell 2000 fell 0.5%. That showed the rebound was still concentrated in larger technology companies.

The market message: AI recovered. But the rally still needs broader participation.

Treasury yields remained the main challenge.

The 2-year yield stayed near 4.23%.
The 10-year yield moved near 4.70%.
The 30-year yield remained above 5%.

The bond market did not fully confirm the stock rally. Stocks improved because earnings improved. Bonds stayed cautious because inflation pressure remained.

The 30-year yield near 5% continues creating pressure for expensive stocks. Higher long-term rates reduce the value of future earnings.
The 10-year yield remains the key market level. If yields stay elevated, technology companies need stronger results to keep moving higher.

The rate message is simple: Stocks improved. But bonds still want proof.

The dollar remained firm. The U.S. Dollar Index stayed elevated. The euro remained under pressure. The yen strengthened after recent weakness. The dollar continued receiving support from higher U.S. yields.

A stronger dollar creates a tighter global backdrop. It can pressure commodities and foreign markets. Currency markets are still focused on one question: Where do rates go next?

Commodity markets stayed focused on oil and gold. WTI crude remained elevated. Brent crude stayed high. Gold weakened as rates remained firm. Oil remained the inflation concern. Higher energy prices can keep inflation expectations elevated. That can limit how quickly rates move lower. Gold faced pressure from higher yields and a stronger dollar.

The commodity message:

Monday begins with a stronger stock market, but the same risks remain. The July rebound was driven by earnings. Microsoft showed AI demand can create real results. Amazon added more confidence. But investors are still watching costs. AI spending remains the biggest debate.

The market is asking: Can companies turn AI investment into lasting profits? The answer will come from more earnings reports.

Three forces will shape August:

Stocks ended July stronger. But the next move depends on whether earnings growth can continue while yields remain elevated.

Key reference levels:

Markets enter Monday after a strong July finish. The Nasdaq gained. The S&P 500 moved higher. The Dow strengthened. Small caps weakened. Microsoft and Amazon improved AI confidence. Apple pressured technology. Oil stayed elevated. Treasury yields remained high.

The key takeaway: Friday showed investors are willing to buy AI again when earnings support the story. Microsoft and Amazon restored confidence, but the bond market remains the limit. The next market move depends on whether companies can prove AI spending is creating real profits while rates stay high.