Tech stocks surge, Nasdaq gains over 2% to record high

On July 29, 2026, all three major US stock indexes closed higher, with tech stocks particularly strong. The Nasdaq Composite surged 2.13% to 19,845.62, another record closing high. The S&P 500 rose 1.08% to 5,678.90, just shy of its historic peak. The Dow Jones Industrial Average edged up 0.24%, lagging behind.

Tech Giants Hit New Highs

Large-cap tech stocks broadly strengthened. NVIDIA (NVDA) jumped 5.6%, breaking above $900 for the first time, with a market cap nearing $2.3 trillion. Apple (AAPL) rose 3.2% to a record high, as the market anticipates its upcoming new iPhone and AI services. Microsoft (MSFT) gained 2.8%, also setting a record. Additionally, Amazon (AMZN), Google (GOOGL), and Meta Platforms (META) all posted gains of over 2%.

The semiconductor sector also shined, with the Philadelphia Semiconductor Index up 3.5%. AMD (AMD) rose 4.7%, TSMC (TSM) up 3.9%, and Intel (INTC) gained 2.6%. Strong demand for AI computing power drove chip stocks higher.

Upside Drivers: Rate Cut Hopes and Earnings Season

The market generally attributed the day's tech rally to two factors. First, the Fed's latest rate decision signaled a dovish stance, reigniting expectations for a cut in September. According to the CME FedWatch tool, the probability of a 25-basis-point cut has risen to 65%. Low rates favor growth tech stock valuations.

Second, it is peak earnings season, with tech companies broadly beating estimates. Over 60% of S&P 500 tech firms have reported quarterly results, with 80% exceeding profit expectations. Leaders like NVIDIA and Apple showed strong revenue and profit, along with optimistic forward guidance, boosting investor confidence.

Capital Rotation Accelerates, Tech Regains Favor

Entering the second half of 2026, the US market has seen clear sector rotation. Previously favored energy and financial sectors saw profit-taking, while tech, driven by long-term growth themes like AI and cloud computing, attracted fresh inflows. According to EPFR Global, US tech stock funds saw net inflows of $12 billion in the past week, a three-month high.

Analysts noted that while tech valuations are not cheap, earnings growth can justify the premium. The Nasdaq 100's forward P/E is around 28x, with expected earnings growth near 20%, keeping the PEG ratio in a reasonable range. Structural trends like enterprise digital transformation and AI deployment remain intact, making tech a core long-term allocation.

Risk Warnings and Outlook

Despite short-term optimism, investors should watch for risks. First, the pace of Fed rate cuts remains uncertain; a rebound in inflation could delay easing. Second, some tech stocks have rallied substantially, raising correction risks. Third, US-China tech competition and geopolitics may cause volatility.

For Southeast Asian investors, US stock accounts or related ETFs (e.g., QQQ, VGT) can be used to participate. Consider phased buying and accumulating on dips, avoiding chasing highs. Also monitor upcoming earnings reports and the August Jackson Hole central bank meeting for policy clues.

Overall, the strong US market on July 29, 2026, especially tech's breakout, sets a positive tone for the second half. Supported by rate cut hopes and earnings growth, tech growth stocks are likely to lead the market higher.