Dow Reaches All-Time High, S&P 500 Rises for the Eighth Straight Week

On Friday, the US stock market closed higher, driven by technology stocks, while the bond market was pressured by hawkish policy signals. The S&P 500 index rose by 0.37%, closing at 7,473.47 points; the Dow Jones Industrial Average closed up 0.58%, at 50,579.70 points, once again setting a record for the highest closing level in history. The Nasdaq Index slightly increased by 0.19%.

Overall for the week, the S&P 500 index has recorded an eighth consecutive week of gains, with the index rebounding about 18% since its war-induced low, also marking the longest consecutive gain record since 2023. The Dow and small-cap stocks outperformed the broader market this week, with the Russell 2000 index benefiting from a three-day short-covering rally and closing up 0.91% on Friday alone.

The most significant policy signal in the market on Friday came from Federal Reserve Governor Waller. He delivered a speech titled “Policy Risk Has Changed,” clearly stating "I can no longer rule out the possibility of a rate increase in the future," and supported removing the "accommodative bias" phrasing from policy statements to indicate that rate cuts are no more likely than rate hikes.

Evercore's Krishna Guha pointed out that Waller's remarks confirmed the Fed's hawkish shift, but its actual policy stance was not as aggressive as the rhetoric. He stated he was still willing to continue watching. It is worth noting that Waller's speech was almost synchronized with the swearing-in ceremony of the new Fed Chairman, Wash, who is now facing a rate environment that is significantly more hawkish than what the Fed's dot plot expected.

The money market immediately fully priced in a 25 basis points rate increase within 2026. The two-year US Treasury yield rose by about 4 basis points in a single day to 4.12%, the highest since February; the two-year real yield surged nearly 30 basis points over the week. In contrast, the ten-year Treasury yield fell slightly by about 1 basis point, to 4.56%.

In terms of technology stocks, Qualcomm was the highlight on Friday. Boosted by news that global CPU demand exceeded expectations, Qualcomm's stock price increased to 12.5%, driving the AI chip sector to strengthen as a whole, with the Philadelphia Semiconductor Index rising nearly 2%. On the other hand, Nvidia fell 1.90% against the trend, failing to sustain market sentiment after its earnings release, with a weekly total decline of 4.43%.

Lenovo Group reported a 27% year-on-year increase in quarterly revenue. Driven by this, US computer manufacturers' stocks surged, with Dell Technologies rising 17% and hitting a historical high, and HP rising 15%. Quantum computing concept stocks rose again on Friday.

The Goldman Sachs Prime Book data shows that information technology was the world's largest net inflow sector this week, with the net buying speed being the fastest in the past three months, driven by a combination of long-position building and short-covering. Both total positions and net positions in global information technology hover at historical highs since 2016 within the overall Prime Book.

Regarding Chinese concept stocks, the China Securities Regulatory Commission announced a full ban on illegal cross-border operations of foreign securities, futures, and fund activities. Futu fell more than 27% in a single day, and Tiger Securities fell 25%