US stock indexes moved higher during Friday's trading, led by a sharp rally in Amazon shares after the company's strong earnings reinforced investor confidence that Big Tech's massive investments in artificial intelligence are beginning to deliver meaningful returns.

As of 9:47 a.m. ET:

The Dow Jones Industrial Average gained 82.26 points, or 0.16%, to 52,290.32.

The SP 500 rose 0.12% to 7,446.54.

The Nasdaq Composite advanced 0.34% to 25,208.37.

Amazon shares surged about 13.7% after the company reported robust growth in cloud computing revenue, joining Microsoft and Alphabet in delivering strong cloud results that eased investor concerns over the profitability of heavy AI-related spending.

Apple, however, fell 9.8% in early trading after warning that supply constraints would weigh on its growth rate, prompting investors to focus on the potential impact of expected iPhone price increases in the coming months.

Technology earnings calm investor concerns

Some analysts described this week as a defining moment for the technology sector following a broad selloff in AI-related stocks throughout July, driven by profit-taking as investors waited for evidence that massive AI investments were beginning to generate tangible financial returns.

Amazon posted its strongest revenue growth in more than four years during the latest quarter, joining Microsoft and Alphabet in highlighting the resilience of their cloud businesses. That performance encouraged investors to look past the sharp decline in free cash flow reported by several of the major technology companies.

Chip stocks continue to recover

Microsoft gained 1.8% after recording the largest single-day increase in market capitalization in US stock market history during the previous session.

Alphabet and Meta both climbed more than 2%, while Nvidia rose 1.3% and Micron advanced 1.6%.

Despite the strong finish to the week, all three major US stock indexes remain on track to post weekly gains.

On a monthly basis, however, both the SP 500 and the Nasdaq are still headed for losses in July following the sharp selloff in artificial intelligence-related stocks earlier in the month.

Interest rate expectations shift

The week also brought renewed uncertainty over monetary policy after the Federal Reserve left interest rates unchanged.

Comments from Fed Chair Kevin Warsh, combined with softer-than-expected inflation data, increased market expectations that the Federal Reserve will leave interest rates unchanged at its September meeting. According to CME Group's FedWatch Tool, the probability of rates remaining on hold has risen to 35%, up from around 18% a week ago.