U.S. equity markets closed higher Friday, extending a weeklong rally fueled by strong corporate earnings, easing trade tensions, and anticipation of key policy signals from the Federal Reserve next week.

At the closing bell, the Dow Jones Industrial Average rose 208.01 points, or 0.47%, to 44,901.90. The S&P 500 added 25.29 points, or 0.40%, to finish at 6,388.64, while the Nasdaq Composite gained 50.36 points, or 0.24%, to end at 21,108.30. The Russell 2000, a gauge of small-cap stocks, advanced 0.38% to 224.39.

The gains came amid a surge in industrials and tech shares, with investors digesting a string of high-profile earnings reports. Alphabet Inc. beat expectations earlier this week with $96.4 billion in revenue for the second quarter, including a 32% year-over-year jump in Google Cloud revenue to $13.6 billion and doubled operating income at $2.83 billion. By contrast, Tesla's results underwhelmed as automotive sales declined 16% and gross margins slipped to 4.1%, despite CEO Elon Musk reiterating long-term ambitions for autonomous technology.

The broader equity rally has been powered in large part by a narrow band of mega-cap stocks. “The bottom line is that returns in the S&P 500 are not diversified but instead remain extremely concentrated in a small group of tech stocks,” Dr. Torsten Slok, Chief Economist at Apollo Global Management, noted in a recent commentary. He pointed out that more than half of a $660,000 return on a $1 million S&P 500 investment since 2021 would have come from just 10 companies, including NVIDIA, Microsoft, and Apple.

Gold futures for August delivery fell 0.97% to $3,340.80, and crude oil for September declined 1.39% to $65.11, amid broader commodity weakness. Meanwhile, the yield on the 10-year Treasury slipped slightly to 4.386%, signaling modest buying interest in bonds ahead of next week’s Federal Reserve meeting.

Looking ahead, all eyes turn to the Fed’s two-day policy meeting concluding July 30. Despite growing speculation over a possible rate cut, Brad Case, Chief Economist at Middleburg Communities, remains skeptical. “Even if the FOMC were to cut rates at the next meeting—which I don’t think they will do—that doesn’t mean that mortgage interest rates will drop,” Case told AInvest. He emphasized the role of balance sheet tightening as a more important factor for long-term borrowing costs.

Markets will also parse a heavy slate of earnings next week, with reports expected from Microsoft, Meta, Amazon, Apple, Visa, and ExxonMobil. The week concludes with the July employment report on August 1, which could further influence the Fed’s policy trajectory.