The S&P 500 continues to set new All-time highs daily, with attention on the Magnificent Seven earnings, FOMC, and tariffs trio | The Path to Becoming a U.S. Stock Master by Heihachiro Okamoto | Moneyクリ MoneyCross Securities' investment information and media useful for money.

Funding inflows are accelerating into sectors beyond technology.

Last week (week of July 21), the US stock market saw a strong performance with both the S&P 500 and Nasdaq 100 reaching all-time highs. The S&P 500 has set new records for five consecutive trading days, marking a significant achievement since the latter half of 2021. This momentum is supported by robust economic indicators and earnings reports that exceeded expectations, particularly the growth expectations in the technology sector centered around generative AI, which underpin the strength of the market.

Strong corporate performance is spreading not only to AI-related companies but also across a wide range of industries, accelerating capital inflows into sectors beyond technology. This suggests that the current market is not merely a thematic stock-picking phase, but rather a healthy and sustainable market expansion backed by actual demand and profit growth.

One should calmly accept situations where temporary price adjustments occur in stock prices.

On the technical side, there is a growing sense of overheating in the market. Both the RSI (Relative Strength Index) of the S&P 500 and the Nasdaq Composite Index have surpassed 70, reaching what is known as the "overbought" level. Furthermore, the VIX index (commonly referred to as the fear index) has fallen to its lowest level since February 14, 2025, indicating a significant increase in market participants' risk tolerance.

In fact, some investors who had built short positions in anticipation of market adjustments are liquidating their positions to avoid further expansion of unrealized losses, and this short covering is contributing to the rise in stock prices. Overall, it can be said that the current market sentiment is quite optimistic.

However, considering past statistics, it is customary for the S&P 500 to experience adjustments of around 10% approximately once a year, while minor adjustments of around 5% tend to occur about three times a year. Therefore, even if a temporary price adjustment occurs in the future, it should not be seen as the beginning of a new decline, but rather as a phase that should be calmly accepted as part of a healthy market cycle.

The industrial sector is leading, with signs of recovery in healthcare.

By industry, the strength of the industrial sector stood out in addition to the technology sector. Stocks such as GE Vernova [GEV] and Newmont [NEM] performed well, driven by the construction of AI data centers and expanded investments in energy infrastructure.

The industrial sector has outperformed the S&P 500 by about 4 points year-to-date, suggesting that the benefits of AI are spreading from hardware to real assets. Additionally, funds have begun to flow into the healthcare sector, which had previously lagged, with the S&P 500 healthcare sector recording a weekly increase of 3.4%.

Palantir Technologies [PLTR] in great shape, Coursera [COUR] surges on better-than-expected forecast

Among individual stocks, data analytics company Palantir Technologies [PLTR] recorded a 110% increase, marking the top performance for the year among S&P 500 constituents, and also updated its high last week (week of July 21). The buy recommendations from analysts who recently initiated coverage on the company contributed to pushing up the stock price.

Additionally, the online education platform Coursera's earnings and guidance significantly exceeded expectations, soaring over 36% in a single day. The demand for e-learning, along with the improvement in learning efficiency through the use of AI, is being recognized.

On the other hand, Tesla [TSLA] faced an 8% decline due to concerns over a slowdown in sales this quarter. However, on the following Friday, July 25th, it rebounded by 3.5%, indicating the presence of investors looking to buy on dips during the decline. Although there are short-term headwinds, it still appears to be a physical AI stock that attracts attention in the medium to long term.

General Motors [GM] is actively increasing its share buybacks despite concerns over rising costs due to tariffs, attracting attention as a stock that appears undervalued with a price-to-earnings ratio of 5.6 times.

This week (week of July 28) the focus is on the Magnificent 7 earnings, FOMC, employment statistics, and tariff deadlines.

This week, multiple events are scheduled to significantly move the market.

First, the earnings reports of major tech companies that account for nearly 20% of the S&P 500, namely Microsoft [MSFT], Amazon.com [AMZN], Meta Platforms [META], and Apple [AAPL], will be announced in concentrated fashion. The market consensus generally expects positive results; however, a significant upside is necessary to justify the current stock price levels, which are at record highs.

Additionally, the July FOMC (Federal Open Market Committee) is scheduled for July 30 (Wednesday), and a hold on interest rates is almost certain. However, it is important to note the political background where President Trump continues to exert "pressure for rate cuts" on Chairman Powell of the FRB (Federal Reserve Board), which raises concerns about the Fed's independence and poses a risk of negatively impacting the bond market.

In addition, regarding tariff negotiations with the United States, it has been reported that the EU has also agreed to a mutual tariff of 15%, following Japan. With China, a ministerial-level meeting is scheduled for this week in preparation for the next deadline for increasing mutual tariffs in mid-August. It will be necessary to continue monitoring the developments of the negotiations that affect the U.S. manufacturing industry.