On July 26, the U.S. stock market experienced a significant increase across all major indices, fueled by a favorable reading on core inflation—specifically the Personal Consumption Expenditures (PCE) Price Index that saw its annual growth rate dip. The market rally was further solidified by a surprising boost in the country’s GDP for the second quarter, as reported the previous day. As trading concluded that day, the Dow Jones Industrial Average (DJIA) rose by an impressive 1.64%, with the S&P 500 and the Nasdaq also showing gains exceeding 1%. Notably, the Nasdaq China Golden Dragon Index increased by 1.22%, reflecting a robust performance from several popular Chinese stocks listed in the U.S.

Numerical data provided by Wind showed that by the end of trading, the DJIA closed at 40,589.34, marking an increase of 1.64%. The S&P 500 ended at 5,459.1, up by 1.11%, while the Nasdaq reached 17,357.88, rising by 1.03%. However, a broader analysis of the week presented a mixed picture; the DJIA cumulatively rose by 0.75%, while the Nasdaq faced a decline of 2.08%, and the S&P 500 fell by 0.83% over the same period.

A closer look at sector performance indicates that all sectors of the S&P 500 saw upward movement, with analysts suggesting that investors are increasingly betting on the continuation of the Federal Reserve's accommodative policies, which they believe will further foster growth among U.S. corporations. Notably, stocks in the financial, industrial, and consumer staples sectors outperformed their technology counterparts throughout July. The Russell 2000 Index, which tracks small-cap stocks, climbed by 1.7%, having gained over 10% for the month, as investors anticipate that these companies may deliver stronger performances in a low-interest-rate environment post-rate cuts.

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In terms of technology stocks, most saw positive movements. Apple increased by 0.22%, while Amazon rose by 1.47%. Contrarily, Netflix saw a slight decline of 0.43%, and Google parent company Alphabet also faced a minor drop of 0.17%. Notable gains were recorded by Meta, which climbed 2.71%, and Microsoft, gaining 1.64% in value.

Chip stocks rallied collectively as well. ASML increased by 2.99%, Qualcomm rose by 2.66%, and Micron Technology was up by 1.82%. Additional significant movements included Broadcom increasing by 1.59%, Advanced Micro Devices (AMD) rising 1.21%, Taiwan Semiconductor (TSMC) adding 1.04%, Intel seeing a 0.8% rise, and Nvidia increasing by 0.69%.

Notably, Chinese stocks that trade on U.S. exchanges also enjoyed a positive day, with the Nasdaq China Golden Dragon Index climbing 1.22%. Among them, Lufax Holdings leapt by 6.73%, while DaJian Cloud Warehouse rose by 6.2%. Other significant gainers included Gaotu Techedu, climbing 5.83%, and Canadian Solar's subsidiary, Arctech Solar, rising 5.74%. Meanwhile, shares of Chinese electric vehicle makers were a mixed bag: NIO increased by 3.63%, Xpeng Motors was up 3.78%, while Li Auto saw a slight drop of 0.31%.

On the economic data front, the latest figures released by the U.S. Department of Commerce revealed that the PCE Price Index for June had declined to an annual growth rate of 2.5%, which marks a five-month low. The core PCE Index, excluding food and energy, saw a modest 2.6% increase year-on-year, which aligned with analysts' predictions. This trend is seen as a signal that inflation in the U.S. could be stabilizing, with market consensus expecting the Fed to maintain current interest rates in July, while betting on potential rate cuts in September.

Furthermore, the University of Michigan's consumer sentiment index for July dropped to an eight-month low, falling from 68.2 in June to 66.4. Analysts attribute this decline to a continued decrease in consumer confidence since the first quarter; although inflation is showing signs of easing, wage growth remains modest. This situation is particularly troubling for low-income individuals, who remain significantly affected by high prices and uncertain financial conditions.

Turning to precious metals, gold prices witnessed a notable rally, with spot gold prices surpassing $2,390 per ounce at one point during trading. COMEX gold futures increased by 1.37%, closing at $2,385.7, while London gold was up 0.96%, trading at $2,386.89. Silver also saw gains, with COMEX silver futures rising by 0.34% to $28.07 and London silver increasing by 0.31% to $27.915.

In the commodities market, concerns over future oil demand projections placed downward pressure on oil prices. On July 26, international oil prices fell, with light crude oil futures on the New York Mercantile Exchange dropping by 1.43%, while Brent crude oil for September delivery declined by 1.51%. For the week, prices for NYMEX light crude fell by a total of 3.71%, and Brent crude reported a cumulative decrease of 1.82%.

In other markets, U.S. Treasury yields across the board fell, with two-year yields declining by 4.5 basis points to 4.394%. Similarly, three-year yields fell by 5 basis points to 4.206%, five-year yields by 5.1 basis points to 4.085%, while the 10-year and 30-year notes dropped by 4.6 basis points to 4.2% and 3.1 basis points to 4.456%, respectively.

Lastly, on the European front, all major stock indices closed higher on July 26. The positive sentiment in global markets as selling pressures eased further strengthened by favorable U.S. inflation data led to a rebound after two consecutive days of declines. Notably, the UK stock market rose by 1.21%, France's by 1.22%, and Germany's witnessed a growth of 0.65%.