Three major US stock indexes diverge: Nasdaq hits new high, Tesla FSD subscriptions surpass 2 million

Market Overview: Nasdaq leads, Dow lags

On July 26, 2026, Eastern Time, the three major US stock indexes diverged. The Nasdaq Composite rose 1.2% to 22,358, a record high, driven by strong earnings from tech giants. The S&P 500 edged up 0.3% to 5,624, while the Dow Jones Industrial Average fell 0.5% to 41,287, dragged down by weak traditional industrial stocks. Market focus this week is on the Fed's latest rate decision and Q2 earnings of tech giants.

On July 25, the Fed kept the federal funds rate at 5.25%-5.50%, as expected. The statement retained the phrase "no rate cut until inflation moves sustainably toward 2%," but hinted at increased concern about a slowing labor market. The market expects the first rate cut possibly in Q4 2026. As a result, the 10-year Treasury yield edged down to 4.12%, and the dollar index weakened slightly, supporting tech stocks.

Tech Stock Rally: Apple, Microsoft, Nvidia Hit New Highs

The tech sector rose broadly, with all six mega-cap stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta) closing higher. Apple jumped 2.3% on better-than-expected pre-orders for Vision Pro 2.0, reaching a market cap of $4.2 trillion. Microsoft gained 1.8% on Azure cloud revenue surging 28% YoY. Nvidia rose 3.2% on sustained AI chip demand, hitting a $3.8 trillion market cap for the first time.

Notably, the semiconductor sector surged, with the Philadelphia Semiconductor Index up 2.6%. Besides Nvidia, AMD, Broadcom, Qualcomm also posted gains. Analysts believe global AI computing investment remains in an upcycle, with data center construction driving semiconductor orders.

Tesla FSD Subscriptions Exceed 2 Million, Autonomy Accelerates

Tesla was one of the most watched stocks. After the close, it announced global FSD subscriptions had exceeded 2 million, up 25% from the end of last quarter. CEO Elon Musk said on social media: "FSD Beta V14 shows significant performance improvement; accident rate dropped to 1/8 of human drivers, and subscription conversion continues to rise."

Stimulated by the news, Tesla shares rose 4.5% in after-hours trading. Analysts noted that as FSD subscriptions scale, Tesla is accelerating its transition from automaker to software service company. Goldman Sachs raised its target from $350 to $420, maintaining a "Buy" rating.

Energy Sector Under Pressure, Oil Prices Fall

In contrast to hot tech stocks, energy sector was weak. Due to growing expectations of a global economic slowdown and reports that OPEC+ may ease voluntary production cuts, NYMEX light crude for September delivery fell 2.3% to $74.50/barrel. Exxon Mobil, Chevron and other energy giants fell over 1%.

Additionally, some defensive sectors like utilities and healthcare edged lower. Market risk appetite tilted toward growth tech stocks, with funds flowing out of value stocks.

Economic Data: Confidence Index Falls, Inflation Awaited

On the economic data front, the US July Conference Board Consumer Confidence Index came in at 108.5, down from 112.3, missing expectations. Consumer optimism about the job market and future income cooled. Meanwhile, the June core PCE price index will be released on Friday; the market expects it to slow to 2.5% YoY, still above the Fed's 2% target.

Analysts believe that US stocks are at historically high valuations, but earnings growth (especially AI-related) provides fundamental support. In the short term, the Nasdaq still has upward momentum, but investors should watch for sector rotation and geopolitical risks.

Outlook: Can Tech Stocks Continue to Lead?

Looking ahead, corporate earnings will continue to roll in. Next week will see Amazon, Google, Meta earnings. The US July nonfarm payrolls report will be released next Friday. The market expects job growth to slow to 180,000, with unemployment steady at 4.1%.

Overall, the Fed's policy path, inflation trends, and corporate earnings will be key to determining the direction of US stocks. Tech stocks have structural opportunities amid the AI wave, but concentrated holdings may bring volatility. Investors may consider reasonably valued growth stocks and cyclical sectors benefiting from lower rates.