Can US tech stocks keep climbing after record highs?

US stock markets rally to record highs

United States (US) stock markets finished last week on a high note, with the US 500 (S&P 500) and US Tech 100 (Nasdaq 100) reaching new record highs on Friday night as the summer melt-up continued.

Gains were supported by trade deal optimism, resilient economic data, and stronger-than-expected corporate earnings. For the week, the US 500 added 1.46%, the US Tech 100 climbed 0.90%, and Wall Street (Dow Jones) rose by 559 points (1.26%).

Trade developments boost market sentiment

Starting with trade developments, last week’s US trade deal with Japan was followed over the weekend by a similar agreement with the European Union (EU). The deal with the EU includes $600 billion of EU investment in the US, with a focus on energy and defence spending. It also includes a 15% tariff rate on most goods, including cars, pharmaceuticals, and semiconductors, while metals are excluded from the agreement.

The positive news on the EU front, agreeing to a 15% tariff rate, half the previously threatened 30% rate, was supplemented by a report in the South China Morning Post that the US and China will extend their tariff pause for 90 days during talks in Stockholm this week.

With the risk of a prolonged trade war and the importance of the August tariff deadlines being steadily defused, markets have responded positively, with US 500 equity futures trading about 0.4% higher at 6450 after their reopening.

Federal Reserve and economic data outlook

Looking ahead, the Federal Reserve (Fed) is widely expected to keep interest rates on hold at its meeting on Thursday morning, with Governors Waller and Bowman expected to dissent in favour of a 25 basis point (bp) rate cut. Fed Chair Powell is likely to reiterate a 'wait-and-see' approach, highlighting that monetary policy remains 'well positioned' to assess how the economy evolves and responds to tariffs.

Friday night’s non-farm payroll report will likely carry more importance than Thursday’s Federal Open Market Committee (FOMC) meeting.

For July, the market expects an increase of 106,000 jobs and is looking for the unemployment rate to rise slightly to 4.2% from 4.1% prior. A print of 4.3% or higher would increase the probability of a Fed rate cut in September from about 63% to above 80%.

Busy earnings week for major firms

In the stock space, this week’s earnings schedule is the busiest of the second quarter (Q2) 2025. Notable firms set to report include four of the 'Magnificent Seven': Microsoft, Amazon, Meta, and Apple.

With about 31% of US 500 companies having reported so far, earnings growth is tracking around 6% year-on-year (YoY), with sales growth near 5%.

US tech 100 technical analysis

Following the US Tech 100’s surge higher on 12 May, we have been working with the view that the rally from the 21 April 17,592 low is a Wave III (Elliott Wave).

Specifically, the rebound in late June from our key 21,500 - 21,450 support zone opened the way for the US Tech 100 (Wave III) to push to within a stone's throw of strong weekly trend channel resistance, now at 23,400.

We expect this weekly resistance level to at least stall the US Tech 100’s recent gains. However, a sustained break below short-term support at 22,650 - 22,550 is needed to indicate that the Wave III is complete and that a Wave IV pullback is underway.

The initial target for the Wave IV is a band of support near 22,000, with a sustained break of this level opening the way for a deeper Wave IV decline towards support at 21,500 - 21,300.

US tech 100 daily chart

US 500 technical analysis

Following the US 500's surge higher on 12 May, we have been working with the view that the rally from the 21 April 5101 low was a Wave III (Elliott Wave) that should be followed by a Wave IV pullback.

The rebound in late June from our key 5950 - 5920 support zone opened the way for the US 500 (Wave III) to push to new highs.

However, with the US Tech 100 now approaching critical resistance, it's important to note the downside levels in the US 500, which might indicate the Wave III is complete and a Wave IV pullback is underway.

Specifically, a sustained break of short-term support at 6200 - 6180 would be an initial indication that a Wave IV pullback is underway. The initial target for the Wave IV is a band of support in the 6150 - 6130 area, with a sustained break of this level opening the way for a deeper Wave IV decline towards support at 5970 - 5950.

US 500 daily chart

• _{Source: TradingView. The figures stated are as of 28 July 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}