On July 29, 2026, the US stock market rallied again, with the Nasdaq Composite Index closing at a record 16,854.21 points, the S&P 500 rising 0.8%, and the Dow Jones Industrial Average gaining 0.5%. Behind the upbeat market sentiment were two key catalysts: clear rate-cut signals from Fed officials' latest remarks, and stellar quarterly earnings from tech giants like Apple and Microsoft, far exceeding Wall Street expectations.
Amid such strong market performance, a deeper question deserves investors' attention: Why does global capital consistently view US stocks as the core of equity allocation? This article starts from the latest market events and combines long-term US stock advantages to explain why choosing US stocks remains strategically significant at this point.
1. Market Snapshot: Rate Cut Hopes & Tech Earnings Drive Rally
1. Clear Fed Policy Shift Signal
On July 28, Fed Chair Powell stated clearly in a public speech that core inflation is close to the 2% target and the labor market is cooling. If subsequent data aligns expectations, the Fed may start its first rate cut in September. CME FedWatch shows the probability of a 25-basis-point cut in September has surged to 78%, with expectations of over 75 basis points in total cuts this year. The rate cut expectations directly boosted tech and high-valuation stocks, and the 10-year Treasury yield fell to 4.02%, creating favorable conditions for fund flows into equities.
2. Big Tech Earnings Surpass Expectations: Growth Engine Remains Strong
Tech stocks remain the absolute leader of this bull market. On July 28 after hours, Apple reported fiscal Q3 2026 revenue of $102.34 billion, up 9.2% YoY, with Greater China returning to positive growth and services revenue hitting a record. Microsoft posted $69.2 billion in revenue, driven by 40% growth in Azure cloud services, with net profit up 23% YoY. Combined, the two companies authorized over $150 billion in share buybacks, directly boosting market confidence. Apple rose 6% after hours, and Microsoft gained 5%.
Driven by the ongoing AI wave, tech leaders continue to break business boundaries. Amazon's AWS, Google's cloud business, and Nvidia's AI chips all maintain growth rates above 20%. The profitability and innovation vitality of tech stocks form the cornerstone of the long-term US stock bull market.
2. Core Advantages of US Stocks: Why Global Investors Have No Alternative?
1. Deepest Liquidity Pool Globally
The US stock market's average daily trading volume exceeds $500 billion, nearly three times that of A-shares and more than five times that of major European exchanges. Extremely high liquidity allows investors to enter and exit rapidly at low cost, and deep order books reduce the impact cost of large trades. For institutional investors, the US market is the only one that can accommodate shifts of hundreds of billions of dollars without causing massive volatility.
2. Mature System: Registration System & Investor Protection
The registration-based IPO system enables full market survival-of-the-fittest: hundreds of companies list each year, while many zombie firms are delisted. Strict disclosure rules, class-action lawsuits, and short-selling mechanisms collectively constrain corporate behavior. Investors can use short selling to correct overvalued stocks, keeping overall US stock valuations within a reasonable range over the long term.
3. "Perpetual Growth" Led by Tech Leaders
In the S&P 500, tech stocks weigh over 35%, and the top ten components include global tech giants like Apple, Microsoft, Google, Amazon, Nvidia, and Meta. These companies not only have strong cash flows and moats but also continue investing in frontier areas such as AI, cloud computing, and autonomous driving. Over the past decade, the S&P 500 has delivered an annualized return of about 13%, while the Nasdaq 100 has returned nearly 20%, far outperforming other major indices.
4. Risk Diversification & Global Asset Pricing Power
US stocks include not only domestic consumer, financial, and healthcare sectors but also many multinational companies with high international revenue exposure. Investing in US stocks effectively shares in global growth dividends. Moreover, the dollar's status as the global reserve currency gives dollar-denominated assets a natural "safe haven" attribute. During global risk events, capital often flows back to US stocks, creating a positive feedback loop.
3. A-Shares vs. US Stocks: Why Cross-Market Allocation Is Essential?
Many Chinese investors are accustomed to A-shares or Hong Kong stocks, but these markets differ significantly from US stocks. A-shares are heavily influenced by policy and are highly volatile, while Hong Kong stocks are deeply exposed to foreign liquidity and have long been undervalued. In contrast, US stocks offer the most stable macro environment globally, the strongest corporate earnings power, and the most transparent trading rules. Allocating a portion to US stocks can significantly reduce overall portfolio volatility while raising return potential.
For example, from 2025 to date, while A-shares experienced turbulence, the S&P 500 rose 18% and the Nasdaq 100 surged 25%. Cross-market allocation diversifies single-country risk and lets investors enjoy global growth dividends.
4. How to Enter? From Account Opening to ETF Strategies
1. Account Opening Process Increasingly Convenient
Currently, domestic investors can open US stock accounts online via internet brokers (e.g., Futu, Tiger Brokers, Huamei Securities) and fund them through cross-border remittance or digital currency channels. The entire process usually completes within a week. Ensure the broker is SEC-regulated for fund safety.
2. Beginner Focus: ETFs as an Excellent Starting Point
For new US stock investors, it is recommended to prioritize ETFs. Key options include:
- S&P 500 ETFs (SPY, VOO): Cover 500 large US companies, low expense ratio (0.03%), track long-term US economic growth.
- Nasdaq 100 ETF (QQQ): Focus on tech leaders, higher growth potential but also higher volatility.
- Dow Jones ETF (DIA): Tracks 30 blue-chip stocks, stable style.
- Sector ETFs (XLK Technology, XLF Financial, etc.): Allow sector rotation based on economic cycles.
3. Trading Hours & Costs
US stock trading hours are 9:30 AM – 4:00 PM ET (summer time corresponds to 9:30 PM – 4:00 AM Beijing time), with pre-market and after-hours trading available. Commissions are mostly zero, with only SEC fees (approx. 0.002% per trade).
5. Risk Warnings & Long-Term Perspective
Of course, US stocks are not risk-free. Valuations near historical highs, geopolitical uncertainties, and potential recession risks may trigger corrections. However, historically, every major pullback (e.g., 2020 pandemic, 2022 rate hikes) proved to be a good buying opportunity. Over the long term, the US economy's innovation capacity, consumer resilience, and institutional self-correction mechanisms provide the underlying logic for sustained appreciation.
With current rate cut expectations and the tech wave converging, US stocks may be at the start of a new long-term upward cycle. For investors seeking global asset allocation and technology dividends, now is the right time to understand and position in US stocks.
Disclaimer: This content is for reference only and does not constitute investment advice. Stock market investing involves risks. Data sources: Bloomberg, Wind, company filings.
