July Market Recap
· Monthly Recap · 5 min read
By Sean Zheng, Editor
Top Global News Events
Amazon's $220 Billion AI Bet Is Paying Off. But How Long Can It Last?
Amazon’s Q2 results demonstrated that billions of dollars invested in artificial intelligence paid off. They drove the company’s revenue increase by 37% to $42.2 billion, while Amazon's shares surged 15.4% in a single session, adding roughly $320 billion to the market value. The company also increased its 2026 capital expenditure guidance by $200-$220 billion due to persistent demand for AI and cloud services.
The company’s decision to continue investing heavily in the development of artificial intelligence infrastructure signals that the competition between tech giants in the AI field is far from over. And the main question is how long the demand for AI-driven services will remain high.
SpaceX’s Rocket Didn’t Launch. Its Stock Took the Hit.
On July 16, Starship’s 13th integrated test flight was canceled due to technical difficulties. Four of the 33 engines on the Super Heavy Booster failed to pass the final tests before launch, triggering an automatic abort. Fortunately, no damage was done because of the incident. Regardless, the situation was unfortunate for SpaceX as a company and its shares, which dropped below $135, the IPO price.
SpaceX’s stock price dropped by around 3%, reaching $ $131.11, later dropping to around $ in the after-hours trading. It was about 30% below the peak value. Although the launch was only postponed for a few days, the price drop demonstrated how fragile the stock is.
South Korea Bets $590 Billion on AI. Will It Pay Off?
South Korea is set to invest approximately 800 trillion Korean won (about $576-$590 billion) in Samsung and SK Hynix to fund semiconductor production, AI infrastructure, and advanced memory development. The move comes as High Bandwidth Memory (HBM) emerges as a critical constraint in the global AI boom, with SK Hynix even warning that shortages of this memory type may persist through the next decade.
While the investment is expected to drive demand for semiconductors and fund the construction of fabrication plants, South Korea seeks to go beyond short-term gains by creating an entire AI manufacturing ecosystem around Samsung and SK Hynix, positioning the firms as key players in the next wave of the AI revolution.
FOMC
The FOMC’s meeting on July 28-29 saw a decision to leave the federal funds target range at 3.50-3.75%. Once again the federal reserve kept rates on hold after a consecutive meeting. The decision was not as overwhelming as in the previous meetings since there were three members who wanted to increase by 0.25 percentage points. The FOMC stated that the economy continues to grow at a healthy pace, and business investment and productivity are strong. Inflation remains elevated, peaking well above the 2% target.
Rate Decision: Held
Rate: 3.50%–3.75%
Market Recap/Trends
Index Performance
Index Performance/Trend
S&P 500. -0.88%
Nasdaq Composite -4.25%
Dow Jones -0.04%
Market trends
July was dominated by the AI spending boom. Amazon’s AWS revenue grew by 37% to $42.2 billion, sending its stock up 15.4% in one session, while the company raised its 2026 capital-spending forecast to $200 -$220 billion. South Korea also announced roughly $576 -$590 billion in AI and semiconductor spending. Meanwhile, SpaceX shares dropped by around 3% after its Starship rocket launch failed. Overall, spending on AI remains at record levels, but investors are starting to ask if the returns are worth it.
In conclusion, the theme of July is heavy spendings. For most of 2026, AI has been employed as a self-justifying rationale for colossal amounts of spending. July placed a more stringent test on the idea. Amazon could still be expected to spend another $200-$220 billion on its AWS cloud due to its fantastic performance. South Korea is ready to invest hundreds of billions of dollars, as the supply of semiconductors is insufficient to meet demand. The market value of SpaceX is a superb example of how stocks can collapse if enthusiasm is not based on facts.