Wednesday (July 28, 2026), all three major US stock indexes rallied, with tech stocks leading the market. The Nasdaq Composite closed at a record high. At the close, the Dow Jones Industrial Average rose 0.7%, the S&P 500 gained 1.2%, and the Nasdaq Composite surged 2.1% to 21,345.67, a new all-time closing high.
Market Sentiment Shift: Fed Pause Expectations Rise
Recent economic data showed the US core PCE price index year-on-year growth fell to 2.1% in June, close to the Fed's 2% target; meanwhile, June personal spending growth slowed and consumer confidence declined. These data strengthened market expectations that the Fed will hold rates steady at its July 30-31 meeting next week. The CME FedWatch tool showed the probability of no change at the meeting has risen to 92%, far above 78% a week ago.
Against this backdrop of shifting monetary policy expectations, investors rushed back into tech growth stocks, pushing the Nasdaq to its fourth consecutive day of gains, with a weekly gain of 4.5%.
Tech Giants Surge: Apple, Nvidia Hit Record Highs
On Wednesday, large-cap tech stocks performed strongly. Apple (AAPL) closed up 3.1% at $287.5, with a market cap exceeding $4.5 trillion, setting another record high. On the news front, the company announced it will release the next-generation iPhone in September and plans to launch augmented reality glasses, which was well received by the market.
Nvidia (NVDA) rose 4.2%, breaking through the $800 mark, driven by sustained demand for AI chips. After several Wall Street investment banks raised their target prices last week, another major bank raised Nvidia's target to $950 today, pushing the stock higher.
Microsoft (MSFT) rose 2.6%, with its cloud business Azure revenue growth again exceeding expectations. Amazon (AMZN) gained 1.9%, Meta (META) rose 3.5%, and Google (GOOGL) added 2.3%.
Fund Flow Tracking: Tech Sector Attracts Over $10 Billion
According to data, on Wednesday, funds flowed massively from defensive sectors to tech. The tech sector saw net inflows of $11.2 billion, a single-day record in nearly three months. In contrast, defensive sectors like utilities and healthcare experienced net outflows.
This fund movement is closely related to changes in market expectations for interest rates. When the market expects rates to remain high for an extended period, growth stocks face valuation pressure; conversely, lower rate expectations benefit growth stocks. Investors are clearly preparing for a Fed pivot today.
Sector Rotation Evident: Energy, Financials Rise Together
Besides tech, other cyclical sectors also performed well. Driven by a rebound in international oil prices, the energy sector rose 1.8%. Exxon Mobil (XOM) and Chevron (CVX) gained 2.1% and 1.5% respectively. The financial sector edged up 0.9%, with JPMorgan Chase (JPM) and Goldman Sachs (GS) rising 1.2% and 0.8%. The regional bank index climbed 1.5%, extending its recent rebound.
Outlook: Focus on Fed Decision and Tech Earnings Next Week
With the Nasdaq hitting a new high, market sentiment has turned optimistic. However, analysts caution that the Fed's interest rate decision next week remains a key risk event. If the Fed unexpectedly sends a hawkish signal, it could trigger market volatility. Additionally, tech giants such as Apple and Amazon will report earnings next week, and their performance will directly determine whether tech stocks can sustain the rally.
Overall, the market is in a window where "soft landing" expectations and rate cut expectations are intertwined. If inflation continues to moderate and the economy remains resilient, US stocks could rise further led by tech. Investors should closely monitor next week's policy signals and corporate fundamentals.
