Market recap · 31 July 2026

US stocks

2026-07-31 Market Review

📈 The Nasdaq leading the gains confirms a primary trend recovery in technology and consumer discretionary, but the overall market presents a divergent pattern of index gains alongside individual stock declines. The short-term focus should be on grasping structural opportunities within the main growth trend.

I. Market Overview

Today, the US stock market overall presented a divergent and oscillating pattern characterized by "strong indices, weak individual stocks." All three major indices closed higher, but the number of declining stocks (282) slightly exceeded advancing stocks (221). Total turnover was $531.8 billion, remaining at a relatively balanced level recently. The VIX volatility index retreated significantly, indicating that macroeconomic panic is fading and market risk appetite is in a recovery phase.

• Market Signal: 42/100 (Oscillating, requires observation)
• Signal Basis: Advancing stocks account for 44%, market divergence; major indices average change +0.74%
• Actionable Advice: Signal divergence, control position sizing and wait for volume-price confirmation.

II. Index Structure

The three major indices showed a synchronized upward trend, with the Nasdaq Composite (+1.00%) performing the strongest, serving as the core engine driving the broader market higher. The S&P 500 (+0.70%) and Dow Jones Industrial Average (+0.53%) followed steadily. The Nasdaq's outperformance indicates that current capital is primarily concentrating in the technology and growth sectors. The broader market indices are operating well above key support levels without any obvious bearish divergence signals, and the overall structural trend remains upward.

III. Sector Themes

Sector rotation exhibited a very strong growth-led characteristic. Consumer Discretionary (+3.26%) and Communication Services (+1.53%) led the gains significantly, forming today's clear tradable main themes. This indicates that capital is actively positioning in high-beta, pro-cyclical growth tracks. The strength in Energy (+1.00%) provided some auxiliary cyclical support. In contrast, defensive and upstream cyclical sectors such as Materials (-2.37%) and Utilities (-0.73%) led the declines, further confirming the logic of market capital switching from defense to offense.

Top 5 Advancing Sectors

Top 5 Declining Sectors

IV. Capital and Sentiment

Although the indices were entirely in the green and the VIX index plunged nearly 7% to a safe zone of 15.90, indicating a massive easing of macroeconomic risk expectations, the internal structure of advancing/declining stocks (221 up / 282 down) revealed that this is not a broad-based rally. Instead, it is a typical top-heavy concentration effect of "profiting from the index but not the individual stocks." Total turnover remained at a normal level of $531.8 billion, showing that the market did not experience an influx of emotional, trend-chasing incremental capital; rather, it is mostly existing capital crowding into advantageous tracks.

V. News Catalysts

There were no major macroeconomic or industry news disruptions today. In a relatively vacuumed news environment, the market spontaneously chose the path of least resistance (Consumer Discretionary and Communication Services) for a breakout. This type of purely technical and capital-driven price action typically possesses good short-term continuity.

VI. Tomorrow's Trading Plan

• Trading Conclusion: Balanced leaning towards offensive
• Position Range: 60% - 70% (Maintain some flexibility to handle divergence)
• Focus Areas: Continue focusing on high-beta tech/growth sub-sector leaders like Consumer Discretionary and Communication Services. Watch for trending opportunities in the Energy sector on dips.
• Avoid Areas: Avoid traditional defensive sectors and sectors with broken technical trends or continuous capital outflows, such as Materials and Utilities.
• Invalidation Conditions: If the Nasdaq index opens lower and breaks below today's pivot tomorrow, or if the VIX index rapidly spikes above 18 intraday, it indicates a reversal in risk appetite. In this case, immediately shift the strategy to defensive and reduce position sizes.

VII. Risk Warnings

1. Be wary of liquidity risks in individual stocks masked by index strength. If the divergence in advancing/declining stocks widens further, it could trigger profit-taking selloffs.

2. Pay close attention to whether upcoming macroeconomic data releases will disrupt the current stable expectations of a news vacuum.

China A-shares

📈 2026-07-31 Market Review

The market is showing a pattern where massive volume broad-based rallies coexist with extreme divergence. The technology growth main line has comprehensively exploded. Tomorrow, focus needs to be on weeding out the weak and keeping the strong in the front row of the main line, as well as the sustainability of volume and energy.

📊 I. Market Overview

Today, the overall market presented an extremely strong short-squeeze rebound pattern. Over 4,600 individual stocks across both markets rose broadly, with hundreds hitting the daily limit up and zero hitting the daily limit down, creating an excellent money-making effect. Turnover broke through the massive volume of 2.5 trillion yuan, and market sentiment is blazing hot, representing a typical offensive, strong market.

• Market Signal: 78/100 (Strong, clear to attack)
• Signal Basis: Rising stocks accounted for 87%, money-making effect spreading; major indices average change +0.49%; limit up/down difference +101
• Operational Suggestion: Risk appetite is acceptable, focus on the continuation of the main line and position discipline.

🧭 II. Index Structure

The indices showed significant structural divergence characteristics: the SZSE Component Index led strongly with an increase of over 2%, and the SSE Composite Index steadily pushed up to break through the 3800-point mark; while indices like the ChiNext Index, STAR 50, and CSI 300 were unusually flat. The strong explosion of the Shenzhen market reflects that current capital's main attack direction is highly concentrated in specific small and mid-cap technology growth areas, while the sluggishness of large-cap value blue chips and some track heavyweights has suppressed some core indices.

🎯 III. Sector Main Lines

Sector rotation presented clear characteristics of "abandoning defense for sharpness." IT services, software development, and automation equipment set off a collective wave of limit-ups, becoming the absolute main lines taking over market activity. This reflects the strong bullish consensus of massive capital towards grand tech and the digital economy direction. Relatively speaking, major financial sectors like banking and insurance, which were previously defensive varieties, along with energy metals, led the declines, indicating that capital is withdrawing from high-dividend safe-haven assets and old tracks, completing a fierce high-low switch.

Top 5 Advancing Sectors

Top 5 Declining Sectors

💰 IV. Capital & Sentiment

Turnover in both markets soared to 2.55 trillion, and the sharp expansion of volume directly supported the spectacular scene of hundreds of limit-ups, indicating that short-term risk appetite has climbed to a peak. There were no limit-downs all day, the market is in an extreme state of excitement, and support is extremely strong. However, it should be noted that the consensus of sentiment under massive volume often implies that it will face a divergence test of decline from prosperity the next day, and trailing follower funds could take profits at any time.

📰 V. News Catalysts

There are temporarily no new major macroeconomic or industry news events on the board today. Combined with market performance, the explosion of grand tech and automation equipment stems more from the resonance of internal market capital and the logic of high-low sector switching. In the absence of clear external event stimulation, the internal gaming and position adjustments of 2.5 trillion in massive volume capital will directly dominate the short-term market trend.

⚔️ VI. Tomorrow's Trading Plan

• Offensive/Balanced Conclusion: Maintain an offensive posture, but the operational focus shifts from "casting a wide net" to "focusing on the core."
• Position Range: 70% - 80%
• Focus Directions: Hold tightly to the tech main line, focusing heavily on opportunities for front-row core dragons in IT services and software development to turn from weak to strong or advance via continuous limit-ups; keep an eye on low-position first limit-up catch-up rallies in the automation equipment sector.
• Avoidance Directions: Resolutely avoid large financial heavyweights like banks and insurance that are trending weakly against the market, as well as energy metals which are in a continuous downward adjustment channel.
• Invalidation Trigger Conditions: If the grand tech main line experiences a large-scale low open or panic selling at the opening tomorrow, and the two-market turnover fails to maintain the proportional average of historical massive volume (significant shrinkage) within the first half-hour, then an immediate shift to defensive contraction is required.

⚠️ VII. Risk Warnings

1. Massive volume often correlates with peak prices. The massive profit-taking driven by over 2.5 trillion in turnover could easily trigger intense intraday washouts and selling pressure the following day.

2. The short-term gains within the technology main line are excessively large; high vigilance is needed regarding localized stampede risks triggered by trailing follower stocks dropping back.

3. If the severe divergence among indices (such as the stagnation of the ChiNext Index and STAR 50) is not repaired in the short term, it may drag down overall market sentiment.

Hong Kong stocks

2026-07-31 Market Review

The Hong Kong stock market exhibited a pattern of volatile divergence and tech weakness throughout the day. Southbound capital saw a slight net outflow. Tomorrow, the focus will be on whether core tech stocks can stabilize and the sustainability of domestic demand defensive sectors.

📊 I. Market Overview

Today, the Hong Kong stock market was overall in a weak and volatile state. All three major indices closed lower, with the Hang Seng Index dipping slightly, remaining largely flat. However, the Tech and HSCEI indices saw significant downward pressure, dragging down the broader market. The market lacks a clear offensive theme, sentiment has cooled, and defensive characteristics are prominent.

📉 II. Index Structure

Significant divergence was observed at the index level. The Hang Seng Index showed some resilience, but the Hang Seng TECH Index weakened significantly, dropping over 1.2%, and the HSCEI also recorded a certain drawdown. The weakness of tech heavyweights is the core factor dragging down market sentiment, while some traditional industries and consumer sub-sectors provided some degree of market support. In the short term, close attention must be paid to the support level below the Tech index to prevent further downward shifts in the center of gravity.

🎯 III. Sector Themes

Sector rotation exhibited characteristics of "risk aversion and localized domestic demand recovery." The retail and delivery services sectors bucked the trend to lead the gains, reflecting capital clustering into service consumption scenarios with certainty or marginal fundamental improvements during a weak market; non-energy mining also performed well. Conversely, energy minerals, telecommunications, and non-durable consumer goods led the declines, indicating that cyclical sectors and some tech heavyweights are facing profit-taking or capital outflow pressure, and the market has not yet coalesced around a new upward theme.

Top 5 Advancing Sectors

Top 5 Declining Sectors

💰 IV. Capital & Sentiment

Southbound capital saw a slight net outflow of 440 million yuan today. Although the outflow scale is small, the shift in attitude indicates that mainland capital currently leans towards cautious observation or tactical portfolio adjustments. Combined with the weakness in tech stocks, overall market risk appetite is declining, with capital shifting defensively between sectors rather than making trend-following purchases.

• Southbound Capital: Stock Connect total net purchases today: -440 million yuan

📰 V. News Catalysts

Against the backdrop of a lack of major macroeconomic or industry news disturbances, the market is primarily driven by existing capital gaming and technical factors. A vacuum in the news often amplifies fluctuations in capital sentiment, and the current market is more of a natural consolidation and digestion of profit-taking from previous trends.

📝 VI. Tomorrow's Trading Plan

• Strategic Tone: Balanced, leaning defensive
• Position Management: Recommended to control at around 40-50%, maintain flexibility, and reserve capital to cope with potential drawdowns.
• Focus Areas: Domestic demand service sectors exhibiting counter-trend strength and defensive attributes, such as retail and delivery, as well as high-dividend assets with high earnings certainty.
• Areas to Avoid: The energy cycle showing obvious short-term capital outflows, telecommunications dragged down by the tech index's weakness, and high-valuation growth sectors.
• Invalidation Triggers: If the Hang Seng TECH Index strongly engulfs today's bearish candle with high volume tomorrow, or if Southbound capital resumes large-scale net buying (e.g., net inflows exceeding 3 billion yuan), the defensive strategy will be invalidated, requiring a timely shift to an offensive strategy.

⚠️ VII. Risk Warning