U.S. stock markets weakened on Tuesday (July 29, 2025), ahead of a crucial Federal Reserve (FOMC) decision and upcoming earnings reports from major tech companies. The S&P 500 declined by -0.30%, the Dow Jones fell -0.46%, and the Nasdaq 100 slipped -0.21%. These losses erased earlier gains that had pushed the S&P and Nasdaq to record highs, driven by position liquidations and anticipation of key economic events this week.
The main factors weighing on the market included:
- Awaiting Wednesday night’s FOMC decision, where the Fed is expected to keep interest rates unchanged at 4.25%–4.50%, with Chairman Jerome Powell’s comments highly anticipated.
- Second-quarter earnings reports from four mega-cap companies, including Microsoft, Meta, Apple, and Amazon.
- Friday’s U.S. jobs report, including non-farm payrolls and the unemployment rate.
On the positive side, June U.S. trade data showed a surprisingly narrower goods trade deficit, and government officials signaled that a 90-day trade truce extension with China is likely. In addition, July’s consumer confidence index came in stronger than expected.
However, the JOLTS job openings report showed a larger-than-expected decline, raising concerns about a cooling labor market. Shares of UnitedHealth Group fell -7% after disappointing earnings, dragging the Dow lower.
M&A activity also drew attention, with Union Pacific acquiring Norfolk Southern in an $85 billion deal, and Baker Hughes purchasing Chart Industries for $9.6 billion. Despite this, several major companies saw sharp sell-offs after disappointing earnings, including Whirlpool (-13%), Carrier (-10%), UPS (-10%), and PayPal (-8%).
The bond market showed strength, with the 10-year Treasury yield dropping to 4.322%, its lowest level in two and a half weeks. This was driven by weaker labor market data and strong demand in the 7-year bond auction.
Key economic projections this week include:
- Wednesday: ADP employment report, Q2 GDP, and core PCE price index.
- Thursday: Weekly jobless claims, labor costs, personal spending, and PCE index.
- Friday: Non-farm payrolls, unemployment rate, average hourly earnings, ISM manufacturing, and consumer sentiment.
Trade uncertainty continues to cloud the market ahead of the August 1 deadline, when President Trump may impose tariff hikes ranging from 15% to 50% on imports from more than 150 countries, should a trade deal not be reached.
Internationally, European and Asian markets were mixed, while European government bonds traded variably. Short-term inflation in the eurozone eased slightly, reinforcing expectations that the ECB may cut interest rates in September.
