Bloomberg Technologyยท2025-07-28 19:51Market Overview & Expectations - S&P 500 rally is heavily influenced by the earnings of major tech companies, particularly the "Magnificent Seven" [1] - Investors are showing caution due to high valuations and expectations for these companies [4][5] - Earnings expectations for this group have slightly decreased to 16% quarter-over-quarter growth, down from 19% [6] Key Companies & Performance - Microsoft and Meta are significant drivers of the S&P 500 rally, especially since April [2][10] - Apple is down approximately 15% year-to-date, facing scrutiny regarding AI plans and China exposure [3] - Amazon's stock performance is relatively flat year-to-date [2] Earnings Impact & Strategy - Companies must "beat and raise" earnings to sustain the rally in their stocks [6] - Delivering strong results is crucial to justify the stretched valuations of these companies [7] - Positive earnings reports are being rewarded with share price increases, while negative reports are punished [11] Index Level Implications - Poor performance from key companies like Microsoft could lead to turmoil at the index level [10] - Apple's potential recovery could significantly boost the S&P 500 [8]