On July 28, 2026, three major US stock indexes closed higher, with the Nasdaq Composite hitting a record 17,832.45, up 1.8%. The S&P 500 rose 0.9% to 5,621.33, and the Dow Jones Industrial Average edged up 0.3%. The rally was driven by better-than-expected earnings from tech giants Apple, Microsoft, and Google parent Alphabet, whose results all beat market forecasts, injecting a strong boost into the second-half market outlook.

Earnings Highlights

Apple: Record iPhone Sales and Services Revenue

Apple's latest quarterly report showed revenue of $105 billion, up 8% YoY, with EPS of $2.15, above analyst estimates of $1.98. iPhone sales rose 7% to $52 billion, driven by strong demand in Southeast Asia and India. Services revenue (including App Store, Apple Music, iCloud) hit a record $24 billion, up 12% YoY. CEO Tim Cook said generative AI features integrated into the latest iOS system effectively boosted upgrade intentions.

Microsoft: Azure and AI Continue Strong Growth

Microsoft posted quarterly revenue growth of 15% to $75 billion, EPS of $3.45, beating estimates of $3.30. Azure cloud revenue grew 28% YoY, accelerating from 26% in the prior quarter, reflecting continued enterprise cloud migration and AI solution adoption. Microsoft's Copilot product now has over 50 million paid enterprise users, driving productivity and business process revenue up 12%. Microsoft said it will expand AI infrastructure investment, with planned capital expenditure up 20% next year.

Alphabet: Ad Recovery, Cloud Loss Narrows

Google parent Alphabet reported revenue of $92 billion, up 13% YoY, EPS of $1.85, above the $1.75 estimate. Ad revenue grew 11% to $78 billion, boosted by retail and travel. Google Cloud revenue rose 26% to $11 billion, with losses narrowing from $650 million a year ago to $120 million, signaling improving profitability. CEO Sundar Pichai emphasized AI monetization in Search, Cloud, and YouTube.

Market Reaction and Sector Rotation

Following the earnings, Apple, Microsoft, and Alphabet shares rose 3.5%, 4.2%, and 2.8% respectively in after-hours trading. Investors are highly confident in the long-term AI and cloud outlook, funneling capital into large-cap tech. However, some analysts warn that tech valuations are at historical highs with a median P/E above 30x, and any shift in interest rate policy could trigger profit-taking. Energy and financials lagged, indicating risk appetite concentrated in growth stocks.

Macro Backdrop: Fed in Focus

The Fed holds its rate decision meeting this week, widely expected to keep rates unchanged. According to the CME FedWatch tool, the probability of a 25-basis-point rate cut in September has risen to 62% from 55% last week. Dovish signals could further fuel tech stock preferences. Meanwhile, the US Q2 GDP initial estimate is due tomorrow, with a forecast of 2.1% annualized quarterly growth. A beat would reinforce the soft-landing narrative.

Analyst Views and Risk Notes

Goldman Sachs strategist David Kostin said: "Tech giants' earnings prove AI investment monetization; we upgrade tech sector to 'overweight'." But he noted geopolitical risks (e.g., US-China tech competition) and regulatory pressure remain key variables. Morgan Stanley's Mike Wilson was more cautious, saying markets have overreacted to positive news, advising investors to favor defensive stocks. Short term, tech may stay strong, but volatility will increase.

Key Points for Investors

• Earnings Season Continuation: Amazon, Meta, and NVIDIA report next week; strong results could extend tech rally.
• Rate Path: The Fed's dot plot and post-meeting statement will shape rate-cut timing expectations.
• Capital Flows: Watch growth vs. value rotation; avoid chasing highs.
• Risk Management: Set stop-loss/take-profit levels and diversify across sectors.

Overall, the July 28, 2026 stock market performance again underscores tech's dominance. Driven by AI and cloud, Nasdaq's record may be just the start. However, investors must stay alert to macro data and policy changes to adapt flexibly.