U.S. markets are closing out the month with a whipsaw round of stock and bond volatility that has investors looking to the normally sleepy days of August -- and the uncertainty embedded into September -- with increasing concern.

The S&P 500 is on pace to finish July with a modest 0.8% decline, marking its second straight month in the red, while the tech-focused Nasdaq Composite is likely to shed around 4%, taking the slide from its early June peak to around 7.2%.

The PHLX Semiconductor index, meanwhile, has notched wild swings of around 5% in either direction this week, but is likely to close out the month with a worrying 20% slump. That will still leave the chip stock benchmark up more than 60% for the year, but suggests a level of investor concern that will cast a shadow over markets into the summer and autumn months.

Big tech earnings reactions tell the story.

Microsoft posted a 15.5% gain, its biggest since 2008, and added a record $450 billion in market value over the Thursday session after reporting better than expected numbers from its cloud business, alongside a confident tone on its AI investments.

Amazon, meanwhile, soared more than 14% on Friday after boosting its full year spending forecasts, beating Wall Street's cloud revenue forecast for a fifth straight quarter, and noting revenue of $42.2 billion from its flagship Web Services division.

Apple shares, however, suffered their biggest decline in more than a year on Friday, falling around 9%, after the iPhone giant cautioned that chip shortages would hold back September quarter revenue. Meta Platforms fell around 9% on Thursday after it missed the Street's third quarter revenue estimate and posted a massive 91% slump in free cash flow.

The disparate reactions underscore the market's broader indecision, given that the S&P 500 has remained within a tight range of the 7500 point mark for the past 11 weeks.

"Volatility remains intense within the momentum-oriented technology space," says Mark Hackett, chief market strategist for Nationwide, but he sees the moves as "more like a positioning event than the start of a fundamental deterioration in the AI story."

"The growth trade and the Magnificent Seven are no longer trading as a monolith, highlighted by Microsoft's gain juxtaposed with Meta's decline, " he added.

Koen Hoorelbeke, investment and options strategist at Saxo Bank, says markets are of two minds.

Options are effectively pricing in a much lower rate of implied correlation, or how stocks will move in tandem with each other, based on the Cboe Group's 3-month implied correlation index.

At the same time, they're betting on a higher level of idiosyncratic price swings for stocks in the benchmark, based on the elevated level of the Cboe S&P 500 Dispersion Index.

"Those two figures describe the same condition from opposite ends; large expected moves in individual companies, small expected moves in the index that holds them," Hoorelbeke says.

That's borne out in the relatively muted reading for the market's go-to volatility gauge, the Cboe Group's VIX index, which has nudged only 7% higher this month, and sits at 17.56 points, well below the 20-point mark that generally spooks investors.

Bond market volatility is also on the rise, as 10-year benchmark Treasury note yields trade at the highest levels since 2023 and longer-dated 30-year bonds hit a new cycle high of 5.263%, a level last seen before the global financial crisis of 2007.

A host of issues are driving yields higher, but two events this week -- a Federal Reserve policy decision that held rates unchanged but confused markets as to its next step, and a move to weaken the yen from Japan's Ministry of Finance, which likely involved the sale of Treasury bonds -- were uppermost in investor's minds.

Bank of America/Merrill Lynch's MOVE Index, which tracks bond market volatility, posted its first monthly gain in three months in July, and has risen nearly 18% from its late June low.

All of this leaves stocks a bit adrift heading into the next two months, with August traditionally the quietest month of the trading year and September the worst-performing.

But big risks remain.

Labor market data, developments in the U.S. war with Iran and the tail end of the sector quarter earnings slate await next week. Fed Chairman Kevin Warsh's address at its annual central banking conference in Jackson Hole, as well as Nvidia's closely watched quarterly update, also loom large.

Maybe August won't be boring after all?