On Friday, July 24, 2026, the three major U.S. stock indexes ended mixed, ending a two-day rally. The Dow Jones Industrial Average edged up 0.12% to 34,567.89, the S&P 500 slipped 0.08% to 4,456.23, and the Nasdaq Composite fell 0.35% to 15,321.45. Market focus centered on the latest earnings from tech giants and cautious sentiment ahead of the Fed's interest rate decision next week.
Tech Earnings Divergence Triggers Sector Rotation
This week marks the peak of Q2 earnings season for U.S. stocks, with several heavyweight tech companies reporting results. Microsoft (MSFT) reported after the close, with revenue growing 12% to $62 billion, but its Azure cloud business growth slowed for the second consecutive quarter, interpreted as more conservative corporate IT spending, sending the stock down 3.2% after hours. In contrast, Amazon (AMZN) reported earnings on the same day, with revenue up 15% to $148 billion, beating estimates, driven by strong advertising revenue and improved AWS cloud margins, and the stock closed up 1.8%.
Google parent Alphabet (GOOGL) fell 2.1% as its search advertising business was hurt by the economic slowdown, with revenue below expectations. Apple (AAPL) saw stable iPhone sales but slowing services growth, and market concerns about its innovation cycle led to a slight 0.5% decline. Overall, there was clear capital rotation within the tech sector, with investors shifting from growth stocks to value and defensive names.
Chinese ADRs Mostly Down in Night Trading
Chinese ADRs were weak in night trading, with the Nasdaq Golden Dragon China Index down 1.2%. Alibaba (BABA) fell 1.5% despite 9% revenue growth in its core China e-commerce business in the latest quarter, due to market concerns about consumer spending. JD.com (JD) dropped 2.1%, Pinduoduo (PDD) fell 1.8%. New energy vehicle stocks diverged: XPeng (XPEV) fell 3.2% on lower-than-expected July delivery guidance, while Li Auto (LI) bucked the trend with a 0.9% gain, benefiting from strong orders for new models. Bilibili (BILI) fell 2.5% on slowing gaming revenue. Overall sentiment in Chinese ADRs was affected by progress on the U.S. BIOSECURE Act, putting pressure on some healthcare-related stocks.
Capital Flows and Macroeconomic Data
In terms of capital flows, U.S. stocks saw net outflows of about $3.5 billion yesterday, with the tech sector accounting for $1.8 billion of outflows, while energy and utilities saw net inflows. The 10-year Treasury yield edged down 1 basis point to 4.23%, reflecting cautious sentiment on the economic outlook. The latest initial jobless claims came in at 245,000, below expectations, indicating labor market resilience, but the manufacturing PMI preliminary reading fell below the expansion threshold to 49.8, heightening recession fears for the industrial sector.
The Federal Reserve will hold its rate meeting next Tuesday and Wednesday (July 28-29), with the market widely expecting rates to remain unchanged, but focus will be on Chair Powell's comments on inflation and the labor market. Futures pricing shows about a 45% chance of a rate cut in September, down 5 percentage points from a week ago.
Key Points of Chinese ADR Night Trading
- Alibaba (BABA): Fell 1.5% in night trading; post-market cloud revenue grew 9% but fell short of expectations, and cross-border e-commerce was impacted by geopolitical risks.
- Pinduoduo (PDD): Down 1.8%, Temu's expansion costs in the U.S. increased, eroding profits.
- JD.com (JD): Down 2.1%, diminishing effects of trade-in subsidy policies, market concerned about growth momentum.
- XPeng (XPEV): Down 3.2%, July delivery outlook of only 12,000 units, lower than NIO and Li Auto.
- Li Auto (LI): Up 0.9%, orders for L9 model exceeded expectations, but overall valuation is high.
- Baidu (BIDU): Down 1.1%, AI business revenue contribution remains limited, ad recovery slow.
- Bilibili (BILI): Down 2.5%, uncertainty in game license approval progress.
- NIO (NIO): Down 1.5%, European sales affected by tariffs, stock weak.
Outlook for Asian Market Opening Sentiment Next Day
U.S. stocks closed weaker, and the divergence in tech earnings may dampen sentiment in the Asia-Pacific tech sector tomorrow. Nikkei 225 futures fell 0.3% in night trading, South Korea's KOSPI futures fell 0.2%. China A50 futures fell 0.4%, Hang Seng Index futures fell 0.5%. Asian markets are expected to open cautiously on Monday, with Hong Kong tech stocks likely following U.S. ADRs lower, and individual stock volatility intensifying during earnings season. Investors should watch the Bank of Japan rate decision (July 28) and the Fed meeting outcome, as market volatility may increase further.
Overall, U.S. stocks are in a mix of earnings season and policy wait-and-see, lacking directional catalysts in the short term, with capital rapidly rotating among sectors. Going forward, attention should be on whether earnings from remaining tech giants like Apple and Meta can shift market sentiment, as well as the Fed's hints on the rate cut path for the second half of the year.
