U.S. stocks rebounded strongly on the final trading day of July, with the Nasdaq rising 1% to 25,373.85, the S&P 500 gaining 0.7% to 7,489.72, and the Dow Jones adding 276.97 points (0.53%) to 52,485.03, as investors looked beyond higher Treasury yields and focused on strong earnings from major technology companies. Amazon surged 15% after posting better-than-expected results driven by cloud computing growth, while Microsoft climbed more than 20% in July, its strongest monthly performance since October 2007, reinforcing optimism over AI spending. In contrast, Apple fell over 7% despite reporting 22% growth in iPhone sales, as weaker services revenue disappointed investors.
Market sentiment remained mixed as the 30-year Treasury yield climbed to 5.25%, its highest level since 2007, while the 10-year yield topped 4.7%, raising concerns about equity valuations. Oil prices also remained elevated, with WTI crude settling at US$84.67 and Brent crude at US$90.12 per barrel amid ongoing Middle East tensions.
Despite Friday’s rally, July was challenging for technology stocks. The Nasdaq-100 fell nearly 7% for the month, its worst performance since March 2025, while the VanEck Semiconductor ETF (SMH) plunged 16.9%, marking its worst monthly decline since 2008. However, semiconductor shares staged a sharp rebound in Asia, with SK Hynix soaring over 25%, Samsung Electronics rising more than 20%, and South Korea’s Kospi jumping 17.9%, its best trading day on record.
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The “Magnificent Seven” are no longer moving as a single group, with investors becoming increasingly selective rather than treating all mega-cap technology stocks as one AI investment theme. In 2026, the S&P 500 has gained about 9%, while the Magnificent Seven has fallen 1%, as capital rotates toward AI infrastructure companies, energy firms, and semiconductor manufacturers. Vanguard identified 45 companies in a broader AI ecosystem that have doubled in value this year, highlighting that the AI rally has expanded beyond the largest technology names.
Performance within the group has also diverged significantly. Microsoft surged after reporting 43% Azure cloud growth while keeping capital expenditure guidance unchanged, reinforcing confidence in its AI investments. Meta came under pressure after raising spending forecasts again, with investors questioning its strategy of both purchasing and selling computing capacity. Alphabet increased its 2026 capital expenditure by US$15 billion despite missing earnings expectations, while Amazon raised its capex by US$20 billion, supported by stronger AWS margins.
The remaining members also face different challenges. Apple is up 16.4% over the past six months but recently fell nearly 10% on concerns over rising component costs. Tesla has dropped 27% over the same period as free cash flow turned negative, while Nvidia has gained only 3.6%, facing growing competition as major cloud customers develop their own AI chips. Overall, the AI trade is broadening, and stock performance is increasingly driven by each company’s execution and strategy rather than membership in the “Magnificent Seven.”
Despite heightened market volatility, analysts believe there are still attractive investment opportunities outside the technology sector. The S&P 500 is only about 2% below its record high of 7,609.78, even as AI-related stocks have diverged sharply. While Microsoft and Amazon rallied on strong earnings, Meta and Apple declined. Meanwhile, the iShares Semiconductor ETF has fallen 21% this month and the Momentum Factor ETF is down 12%, prompting investors to rotate into more reasonably valued sectors.
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The expectation that interest rates will remain high for longer is making short-term fixed-income investments increasingly attractive. Although the Federal Reserve kept interest rates unchanged, bond markets reacted by pushing long-term Treasury yields to their highest levels in years, causing prices of long-term bonds to fall. Because longer-term bonds are more sensitive to changes in interest rate expectations, they face greater price volatility.
Investment experts argue that investors seeking income should consider shifting toward shorter-duration bonds, particularly those with maturities between two and seven years. These investments can provide attractive yields while reducing exposure to the sharp price swings associated with long-term bonds. Cash equivalents, money market funds, and short-duration bond funds are also viewed as appealing options, while investors willing to take on slightly more risk may find opportunities in highly rated collateralized loan obligation (CLO) funds.
Despite the appeal of higher-yielding assets, experts caution against chasing excessive returns by investing in lower-quality securities. With current interest rates already relatively high, investors can earn meaningful income from high-quality bonds and Treasurys without taking unnecessary credit risk. Financial advisors recommend reviewing bond portfolios to ensure they align with an investor’s income needs and risk tolerance. Overall, the short- to medium-term segment of the bond market is seen as offering the best balance of income, stability, and protection against potential stock market declines in the current higher-for-longer interest rate environment.
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The screened for S&P 500 stocks trading at least a 30% valuation discount to the market, with a forward P/E of 14.8 or lower (versus the S&P 500’s 21.26), at least 20% upside to analysts’ average price targets, and buy ratings from over 55% of analysts. The list spans sectors including energy, financials, industrials, healthcare, utilities, consumer stocks and select technology names such as Micron, Salesforce and Intuit.
Among the standout ideas, Micron offers the highest projected upside at 79%, supported by strong earnings and a 194% year-to-date gain, despite recent volatility. Devon Energy, trading at a forward P/E of 9, has 36% upside and is backed by 76% buy ratings, following its US$58 billion merger with Coterra Energy and plans to optimize its asset portfolio. Carnival offers about 25% upside despite being down more than 9% this year, while Disney, down nearly 16% year to date, has an estimated 32% upside, with analysts optimistic about its profitable streaming business, theme parks, and improving cash flow. Overall, the article suggests investors can still find compelling value by focusing on fundamentally strong companies trading at discounted valuations outside the crowded AI trade.
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Microsoft’s strong Q4 earnings and a record US$450 billion increase in market value in a single day have removed the key post-earnings uncertainty, with the company’s fundamentals remaining solid despite concerns over rising AI spending. Based on this outlook, the article highlights a short strangle options strategy using the Aug. 21 $412.50 put and $485 call, designed to benefit from declining volatility and time decay after earnings.
The strategy generates a premium of US$7.30 per share (US$730 per strangle), offering an estimated 1.6% return over 21 days, or roughly 28% annualized if Microsoft’s share price stays between the two strike prices. On the downside, the $412.50 put provides an effective purchase price of US$405.20 if assigned, while the $485 call requires the stock to rally more than 8.5% from current levels before the position comes under pressure. If assigned on the call, the effective selling price rises to US$492.30 after including the premium received.
Microsoft’s valuation of around 22.6× forward earnings is near the midpoint of its 20-year valuation range, suggesting limited probability of either a major breakdown or breakout. This makes the stock attractive for short-volatility income strategies, although investors should note that selling uncovered calls can expose them to theoretically unlimited losses if the stock rises sharply.
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Chevron and ExxonMobil reported strong second-quarter results as geopolitical tensions in the Middle East pushed oil prices and refining margins higher. Chevron exceeded expectations, posting its highest quarterly profit in at least six years, while Exxon delivered its strongest quarterly profit in four years but slightly missed analyst forecasts. Both companies benefited from higher crude prices, strong refining performance, and record US production.
Chevron reported adjusted earnings of US$12 billion, helped by upstream earnings of US$8.2 billion and downstream earnings of US$4.9 billion. Production increased to 4 million barrels of oil equivalent per day (boepd), while US output reached a record 2.08 million boepd. The company returned capital to shareholders through US$3 billion in buybacks and US$3.5 billion in dividends, while maintaining plans for US$10–20 billion in annual share repurchases. Chevron also achieved US$1.5 billion in synergies from its Hess acquisition ahead of schedule.
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ExxonMobil posted adjusted earnings of US$14.7 billion, up 67% quarter-on-quarter, but below expectations. Production declined slightly to 4.5 million boepd, affected by Middle East disruptions and reduced LNG output from Qatar. However, record Permian Basin production and future Guyana growth helped offset the weakness. Exxon repurchased US$5.1 billion of shares, paid US$4.3 billion in dividends, and reduced net debt by US$7 billion.
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Amazon impressed investors with a strong second-quarter earnings report, driven by exceptional performance in its cloud computing business, Amazon Web Services (AWS). The results eased concerns about the company’s heavy AI spending, as management provided evidence that these investments are generating strong returns. Following the earnings release, Amazon’s shares rose 11%, and Wall Street analysts broadly maintained their buy ratings while raising price targets.
AWS was the standout performer, with revenue growing 37% year over year, beating analysts’ expectations of 31% and marking its fastest growth since 2021. AWS also reported a record $496 billion backlog, signaling strong future demand, while its AI annual recurring revenue (ARR) reached $25 billion. Amazon’s advertising business also exceeded expectations.
Although Amazon’s revenue guidance for the next quarter of $197–202 billion fell short of the $204.1 billion consensus estimate due to the shift of Prime Day from July to June, investors focused instead on the company’s long-term growth outlook. Capital expenditures reached $54.21 billion in the quarter, up 68% year over year, and Amazon raised its 2026 capex forecast to $220 billion. Management explained that AI infrastructure investments have attractive economics, with server and networking investments expected to break even in less than 3 years, while data centers have a useful life of 30+ years.
Analysts viewed these results as evidence that Amazon is strengthening its leadership in AI and cloud computing. Many raised their price targets to between $300 and $375, with the highest target from Goldman Sachs implying nearly 59% upside from the stock’s pre-earnings closing price. Several firms also highlighted AWS’ expanding profit margins, which reached 38.1% (excluding one-time benefits), and the company’s ability to continue gaining market share across cloud computing, e-commerce, and digital advertising.
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Momentum stocks staged a sharp rebound on Thursday, posting their strongest one-day gain since December 2000. The rally was led by technology and AI-related stocks, with the iShares MSCI Momentum Factor ETF (MTUM) rising 5.5%, while the Nasdaq-100 gained 3.4%, its best day since May 2025. The S&P 500 and Dow Jones Industrial Average also climbed 1.7% and 1.2%, respectively.
The surge was driven by several factors, including strong earnings from Microsoft, an oversold market, month-end portfolio rebalancing, and the forced liquidation of AI-focused hedge fund Situational Awareness after it suffered significant losses. Citadel purchased the fund’s public stock positions, helping fuel rallies in several of its major holdings. Nebius jumped 27% on Thursday (and another 10% in early Friday trading), while Micron Technology, CoreWeave, and SanDisk also posted strong gains.
Despite the dramatic rebound, some strategists cautioned that such explosive rallies are often seen during bear markets or downtrends rather than at the beginning of a sustained bull market. They warned that while the move reflected investors rushing back into oversold momentum stocks, it does not necessarily signal a lasting market recovery.
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Singapore’s financial sector has delivered strong gains in 2025, with Great Eastern Holdings (GEH) emerging as one of the top performers. As of July 29, GEH had risen 41%, while its parent OCBC gained 48%, outperforming DBS (+32%) and UOB (+25%). The article suggests that GEH’s strong performance may have contributed to OCBC’s outperformance.
After being delisted during OCBC’s privatization offer, GEH resumed trading in August 2025 at $13.50 and has since become one of Singapore’s best-performing mega-cap stocks. Investor sentiment was further boosted when Allianz agreed to acquire HSBC Life for $2.7 billion, highlighting Singapore’s attractive insurance market, stable economy, and growth prospects. Allianz expects the acquisition to generate a return on investment of over 10% in the short to medium term.
The acquisition also provided a valuation benchmark for Singapore insurers. Allianz paid about 1.5 times HSBC Life’s comprehensive equity, compared with GEH’s current valuation of 1.39 times comprehensive equity. This has led some investors to question whether GEH could be undervalued and eventually trade closer to—or above—the valuation multiple paid for HSBC Life.
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Great Eastern Holdings (GEH) delivered a very strong set of results, with 2Q2026 net profit doubling and 1H2026 net profit rising 43% year-on-year, driven by robust investment performance alongside steady growth in its core insurance business. A change in insurance risk assumptions increased its Contractual Service Margin (CSM) by $513 million and boosted profit by $82.9 million, lifting estimated comprehensive equity to around $21.5 billion. This reduced its price-to-comprehensive equity valuation from 1.39x to 1.23x, making it appear more attractive relative to Allianz’s 1.5x valuation of HSBC Life. Despite GEH’s strong performance, JP Morgan believes much of the optimism is already reflected in parent company OCBC’s share price and recommends trimming OCBC holdings.
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ESR-REIT reported a resilient 1H FY2026 with DPU rising 2.4% to 11.51 cents, supported by higher rental reversions and asset enhancement initiatives (AEIs). Management expects remaining capital gains to be distributed over the next two semi-annual payouts, after which stronger recurring rental income should replace the one-off gains. Leasing momentum remains positive, with 29 Tai Seng expected to reach 100% occupancy soon and 16 Tai Seng set to improve occupancy from 53% to 68%. The REIT also plans to redevelop 2 Fishery Port beginning in 4Q2026. On financing, management expects its cost of debt to remain stable at around 3.5%, will redeem $125 million of notes using cash, reducing gearing to 39.9%, and continues to fund Australian acquisitions using lower-cost Singapore dollar debt before eventually switching to Australian dollar financing when rates become more favourable.
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CSE Global remains a favourite among analysts because of its strong growth prospects from Amazon Web Services (AWS). Analysts estimate CSE currently generates US$20–30 million in monthly revenue from AWS with a 15%–18% market share, and expect another AWS order, potentially exceeding US$100 million, later this year. While growth is temporarily constrained by a shortage of copper and upfront costs at its new US facility, analysts believe these issues should ease by late 2026 or early 2027. CSE is also benefiting from demand in US data centres, LNG infrastructure, and digital infrastructure, and recently strengthened its communications business by acquiring US wireless company SEI for US$8 million.
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Seatrium delivered a strong first-half 2026 performance, with net profit surging 158.3% to S$372.9 million, boosted by a S$172 million one-off gain from the sale of non-core assets. Excluding this gain, underlying net profit still grew 54% to S$212 million, driven by higher-margin projects, improved productivity, and lower costs. Revenue rose 4.7% to S$5.6 billion, led by its oil and gas business, particularly major floating production projects for Petrobras and BP.
Management remains optimistic about future growth, citing strong demand for floating production, LNG, and gas conversion projects. The company is pursuing a S$32 billion global project pipeline over the next two years, including opportunities in floating LNG (FLNG), floating storage and regasification units (FSRUs), offshore wind, and oil and gas. Seatrium also expects FY2026 net profit to be materially higher than FY2025 and plans to launch a new share buyback programme after completing its current S$100 million buyback.
Although the offshore wind business remains weak due to delayed project timelines, management expects demand to recover from 2027, while oil and gas continues to provide strong earnings support. The company’s order book remains healthy at S$13.3 billion, extending through 2033, with most projects now consisting of higher-margin series-build contracts.
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In Hong Kong, the Hang Seng Index ended little changed, rising 0.1%, while technology shares outperformed. Alibaba gained 4.7%, Baidu rose 3.7%, and Tencent added 0.7%, whereas Xiaomi fell 7.3% after launching new vehicles. HSBC reached a record high, while semiconductor stocks also advanced following strong global AI-related sentiment.
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Among Malaysian companies, Unisem reported higher earnings on stronger semiconductor sales, F&N posted higher profit despite weaker revenue, WCT acquired the remaining stake in the developer of Paradigm Petaling Jaya, E&O bought a prime Kuala Lumpur development site, ITMAX secured a RM120 million smart street lighting contract, and MISC won a 10-year LNG shipping contract with Petronas. Meanwhile, Eco-Shop faces a lawsuit over alleged unauthorised demolition of a Penang property, and Kumpulan Jetson‘s forensic review found irregularities in payments and its employee share option scheme.
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