Markets News, Aug. 31, 2026: Major Stock Indexes Post Gains for August Despite Falling Monday Amid Rising Oil Prices

Broadcom (AVGO) reports fiscal Q3 results on Sept. 2, with trailing-12-month revenue up 32% to $75.5B and net income up 127% to $29.3B. Q2 revenue rose 48% to $22.2B, while net income climbed 88% to $9.3B. Guidance for Q3 calls for $29.4B in revenue. Operating expenses increased only 6% YoY in Q2, contributing to profit growth outpacing revenue growth.

Broadcom's gross margin declined to 77.1% YoY in fiscal Q2 2026 due to a shift toward lower-margin AI silicon, but operating margin increased to a record 67%. The company expects gross margin to fall to 74% in Q3 2026, while operating margin remains flat. AI semiconductor revenue grew 143% YoY to $10.8 billion, driving overall revenue of $22.2 billion. The stock has fallen 17.3% in three months but is up 23.7% over a year.

Microsoft, Alphabet, Amazon, Meta, and Oracle are investing heavily in AI infrastructure, with investors scrutinizing returns. Microsoft and Alphabet show strong AI-related profit growth, while Amazon's AWS profits contrast with negative free cash flow. Meta's revenue grows, but costs rise faster. A Reuters analysis suggests these companies' capex may exceed combined free cash flow by 2027. Microsoft's Q4 2026 revenue was $90B, with $41B in capex. Alphabet's Q2 2026 revenue was $119.8B, with $24

The FTC and 22 states sued Amazon, alleging it overcharged advertisers via an opaque auction system, potentially extracting over $20B. Amazon denied wrongdoing, stating its systems benefit advertisers and consumers. The lawsuit seeks penalties and damages. Amazon's advertising revenue grew 26% YoY to $19.8B in Q2 2026. This follows other FTC cases, including a $2.5B settlement over Prime membership practices.

The FTC and 22 states sued Amazon, alleging it manipulated ad auctions, overcharging 1.2M businesses $20B since 2019. Amazon's stock fell 2.5%. The FTC claims Amazon used undisclosed reserve prices, increasing pay-per-click costs. Amazon denies wrongdoing, stating it saved advertisers $8B. The FTC seeks penalties and injunctions.

Amazon.com (AMZN) traded at $254.69, down 1.96% from its previous close. The decline follows a recent rally driven by AWS growth, Nvidia GPU partnerships, and positive analyst targets. AWS revenue rose 37% YoY to $42.2B, with a $496B backlog. Analysts raised price targets to $315-$355, citing AI demand. However, capital spending surged 68.44% to $54.21B, turning free cash flow negative.