The S&P 500 and other major indexes slid on Thursday but recovered on Friday to wrap up the week to the upside.

The Dow Jones broke a 13-day winning streak Thursday, its best since 1987, and was up 0.65% on a weekly basis Friday. The Nasdaq Composite posted a weekly gain of 1.67%.

The Fed decided to relaunch its rate-hike campaign at the latest FOMC meeting, pushing the federal funds rate to 5.25%-5.5%. The cost of borrowing is now at its highest level since 2001. Fed Chair Jerome Powell didn't discard the possibility of a new hike in the upcoming September FOMC meeting. He's worried that core inflation, at 4.8%, continues to be too high but said the Fed will base the decision on the two monthly inflation reports left before the next meeting.

Meanwhile, several macroeconomic measures are showing hope for the U.S. to skip a possible recession. A new report by the Bureau of Economic Analysis put economic growth at 2.4% annually in the second quarter of 2023, beating expectations of 1.8% growth. Consumer confidence rose to a two-year high, driven by a strong job market and a steady decrease in inflation. The personal consumption expenditure price index, which is the Fed's favorite measure for inflation, also fell to a two-year low in June.

Some of the highest profile companies in Big Tech released earnings this week. Microsoft (NASDAQ:MSFT) shares fell 2.19% on the week as investors showed disappointment from slowed growth from Azure, the company's cloud arm. A lack of quick gains from Microsoft's booming AI efforts also disappointed investors, although analysts were quick to say that gains from those developments will come later in the year. Several raised their Microsoft price targets.

Google's parent company Alphabet (NASDAQ:GOOG) posted a year-over-year revenue growth of 7% for the second quarter, beating analyst estimates and taking the company's shares up 8.9% over the week. This caused several analysts to raise their forecasts on the company. Investors also took a liking to the company's advancement in the AI field, where it had been left behind by Microsoft and partner OpenAI.

It's a similar story for Meta (NASDAQ:META), formerly known as Facebook. The company posted 11% year-over-year revenue growth for the second quarter and beat earnings estimates, taking the stock higher by more than 10% on the week. AI investments were also central to the company's competitive strategy, causing several investors to raise their price predictions.

Intel (NASDAQ:INTC) CEO Pat Gelsinger said on the second-quarter earnings call the chipmaker is "well-positioned to capitalize on the significant growth" of AI, although revenue for the second quarter was down 15% year-over-year. Shares climbed 8.8% over the week.

A new proposal aimed at making financial institutions more resilient to hard times would raise capital requirements for big banks by an average of 16%. Banks likes Bank of America (NYSE:BAC) and JP Morgan Chase (NYSE:JPM) slid on Thursday after the news but quickly recovered on Friday,

Shares of Banc of California Inc (NYSE:BANC) soared by 13% weekly as the company announced a merger with PacWest Bancorp (NASDAQ:PACW) through an all-stock deal that will create an entity with $36 billion in assets.

What To Watch: Data from construction spending for June will become available on Tuesday, along with the ISM manufacturing index. On Friday, another economic data point arrives in the form of the July jobs report.

Earnings season continues next week with reports from Merck (NYSE:MRK), Toyota (NYSE:TM), Pfizer (NYSE:PFE), Advanced Micro Devices (NASDAQ:AMD), HSBC (NYSE:HSBC), Caterpillar (NYSE:CAT) and Starbucks (NASDAQ:SBUX) on Tuesday.

Wednesday is earnings day for Qualcomm (NASDAQ:QCOM), CVS (NYSE:CVS), Shopify (NYSE:SHOP) and PayPal (NASDAQ:PYPL). On Thursday, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alibaba (NYSE:BABA), ConocoPhillips (NYSE:COP), Amgen (NYSE:AMGN) and AB Inbev SA (NYSE:BUD) will post results.

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