US equities spent the week caught between strong earnings and a wobble in the AI trade.
The bull case leaned on fundamentals: research pointed to Q2 earnings growth north of 25% year-over-year, a rebound in July PMIs, and year-end S&P 500 targets in the 8,150–8,250 range. Sentiment models cited by analysts still project roughly 10%+ upside over twelve months, with valuation opportunity flagged in small caps and in tech ex-mega-cap internet. Constructive views on Amazon, Microsoft and Meta centered on AWS and Azure momentum and the argument that AI capex is building durable earnings power.
The bear case grew louder. Multiple threads of research flagged a topping pattern in semiconductors after a parabolic run, poor market reception to hyperscaler capex, a technical breakdown in the Russell 2000, and pressure on homebuilders from higher yields. Cautious voices warned that with fiscal drag building and the Fed less proactive, risk/reward for the broad market is skewing lower. Apple and Tesla drew notably more skeptical commentary.