On July 28, 2026 (Beijing time), U.S. three major indexes closed mixed overnight: the Dow Jones Industrial Average edged up 0.13% to 40,230 points; the S&P 500 fell 0.21% to 5,460 points; the Nasdaq Composite faced heavier pressure, closing down 0.68% at 17,820 points, with mixed tech earnings being the main drag.
Diverging Tech Earnings Intensify, Nasdaq Leads Decline
Before the overnight session, several tech leaders reported quarterly earnings with mixed results, causing clear divergence within the tech sector. Chip giant Nvidia (NVDA) posted revenue above expectations, but slowing data center growth raised concerns about peak AI chip demand, sending shares down 3.2%. Apple (AAPL) revenue slightly missed estimates, but strong services growth limited the decline to 0.5%. Conversely, Microsoft (MSFT) beat cloud growth expectations, rising 1.4%. Amid the earnings divergence, funds flowed out of high-valuation tech stocks into defensive sectors. In the S&P 500, the information technology sector fell the most at 1.2%, while healthcare (+0.9%), utilities (+0.7%), and consumer staples (+0.5%) rose, reflecting heightened risk aversion.
Chinese EV Earnings Stand Out, Bucking the Trend
Chinese ADRs were overall strong overnight, with the Nasdaq China Golden Dragon Index up 1.3%, boosted by EV leader earnings. NIO (NIO) reported Q2 2026 revenue up 45% YoY, record deliveries, and gross margin improving to 12.5% QoQ, beating expectations, surging 8.2%. Li Auto (LI) followed with a 4.5% gain, XPeng (XPEV) up 3.8%. Additionally, PDD Holdings (PDD) rose 2.1% on continued cross-border e-commerce expansion, while Alibaba (BABA) edged down 0.3% on weak consumption data. The Chinese ADR sector saw net capital inflows of $230 million, the highest in two weeks.
Capital Game: Flowing from Tech to Defensive Sectors, Asia-Pacific Opening Outlook
Capital flow data shows active U.S. equity funds net sold about $1.5 billion in tech stocks overnight, while net buying $500 million in healthcare and $300 million in utilities. In the bond market, the 10-year Treasury yield fell 2 bps to 3.85% as risk aversion boosted bonds. In commodities, WTI crude oil edged lower to $78/barrel on easing geopolitical tensions and cooling demand expectations.
Looking to the next day's Asia-Pacific markets, U.S. tech pressure may spill over to Japan and Korea semiconductor stocks, but Chinese EV earnings strength could lift Hong Kong EV-related stocks. For Thailand, the SET index closed down 0.3% yesterday and may open lower today on external sentiment, though defensive sectors like healthcare and utilities could attract capital. Investors should watch Fed officials' speeches and subsequent tech earnings; short-term volatility is expected to persist.
Overall, overnight U.S. stocks showed a rotation from tech to defensive sectors, while Chinese ADRs stood out with strong earnings, providing structural opportunities for Asia-Pacific markets.
