NEW YORK, July 25, 2026, 13:10 EDT — U.S. markets finished trading for the day.
- This week, the Nasdaq dropped 2.1%. The S&P 500 was down 0.6%, and the Dow slipped 0.4%.
- Microsoft NASDAQ:MSFT and Meta Platforms NASDAQ:META are scheduled to report on Wednesday. Apple NASDAQ:AAPL and Amazon.com NASDAQ:AMZN are set to release results on Thursday.
- The Federal Reserve will set interest rates on Wednesday. As of late Friday, futures indicated a 38% probability of a 0.25 percentage point hike.
Next week, earnings from four mega-cap companies will account for 17.55% of the S&P 500, surpassing the weight of the full financials sector, which represents 12.37%, by a margin of 5.18 percentage points.
Market concentration remains a focus following a 2.1% drop in the Nasdaq this week. Initial estimates for S&P 500 earnings continue to indicate 26.5% annual growth. Meanwhile, investors reacted negatively to increased AI spending and higher cash burn.
The bar has shifted. Surpassing earnings expectations might not compensate for lower free cash flow. Increased yields also diminish the present value of future profits.
Index weightings reflect figures from July 23. Company calendars provide report dates.
| Company or sector | Report date | S&P 500 weight |
|---|---|---|
| Microsoft | July 29 | 4.45% |
| Meta Platforms | July 29 | 2.09% |
| Apple | July 30 | 7.42% |
| Amazon.com | July 30 | 3.59% |
| Total for these four | — | 17.55% |
| Financials sector | — | 12.37% |
This week saw declines across all four major indexes, though they continue to show gains for 2026. Small caps continue to outperform significantly.
| Index | Friday close | Weekly move | 2026 move |
|---|---|---|---|
| S&P 500 | 7,411.98 | down 0.6% | up 8.3% |
| Dow Jones | 51,947.25 | down 0.4% | up 8.1% |
| Nasdaq Composite | 24,975.82 | down 2.1% | up 7.5% |
| Russell 2000 | 2,930.00 | down 1.1% | up 18.1% |
Markets ended mixed on Friday. The S&P 500 edged up 0.05%, while the Dow advanced 0.46%. The Nasdaq slipped 0.64%.
Markets found support in sectors excluding technology. Real estate advanced 2.4%, while materials climbed 1.44%. The technology sector declined 0.88%.
Intel NASDAQ:INTC fell 7.9% even as it projected revenue and earnings ahead of expectations. The Philadelphia semiconductor index declined by 4.5%.
The alert came on Thursday. Shares of Alphabet NASDAQ:GOOGL dropped 7% as the company increased its spending outlook and ran through cash. Tesla NASDAQ:TSLA fell 14.5% following a report of negative free cash flow.
Oil and bonds weighed on markets. Brent crude closed at $96.78 on Friday, falling 3.88%. The benchmark surpassed $100 on Thursday. The yield on the 10-year Treasury was last near 4.68%, following a peak of 4.71%.
Around a third of S&P 500 firms are scheduled to report. The profit growth forecast stands at 26.5%, still robust. The majority of that growth is already priced into shares.
Cash flow is more difficult to maintain. Reuters analysis shows five hyperscalers may exceed their free cash flow by 2027. Capital expenditures are projected to climb by $534 billion starting 2025, while operating cash flow is expected to grow by $340 billion.
Peter Andersen, CEO of Andersen Capital Management, discussed the change. “The fear of missing out is becoming more like a fear of massive overbuilding.” Reuters
The Federal Reserve holds its meeting on Tuesday and Wednesday. Markets continue to expect rates will remain unchanged. The rate decision is set for 2 p.m. EDT, followed by remarks from Chair Kevin Warsh half an hour after.
Thursday’s data will influence the upcoming discussion over interest rates. Early median projections indicate second-quarter GDP growth of 2.1%. Core PCE inflation is initially estimated at 3.3% year on year.
Risks: Saturday’s strikes on Saudi oil facilities may wipe out Friday’s crude gains before markets open on Monday. An unexpected Fed rate increase would weigh on pricey growth stocks. Robust cash flow combined with disciplined spending could spark a rapid recovery in tech shares.
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