Market Performance Overview (Current Day)
- S&P 500: Declined slightly by 0.12% to close at 6,362.90, showing a pause after recent gains.
- Nasdaq: Rose 0.15% to 2129.67, driven by strength in Nvidia.
- Dow Jones: Fell 0.38% to 44,461.28, continuing yesterday’s slide.
- Gold: Decreased significantly by 1.58% to $3,328.50 per troy ounce.
- Oil (WTI): Extended gains for a third consecutive day, rising 1.63% to $70.00 per barrel, crossing the $70 mark amid ongoing pressure from Trump on Russian and Iranian oil purchases.
- US 10-Year Treasury Yield: Increased 4bp to 4.368%, reacting to Fed comments and a lack of clear dovish signals.
- Dollar Index: Surged over 1% on the ICE Futures market to 99.95, nearing the 100 mark again.
- Overall Market: The market remained largely flat during the day, awaiting the afternoon’s key events (FOMC). Disappointment over the US-China trade talks contributed to early weakness. A late-day rebound occurred, potentially due to strong after-hours earnings.
- Cryptocurrency Market: Remained stable. Bitcoin was down 0.07% to around $117,000. Ethereum was up 0.45% but remained near $3,700. Ripple and Solana saw minor changes, with Solana down 2%.
Sectoral Performance & Key Stock Movements
- Heatmap: Generally weak across most stocks outside the S&P 500.
- Novo Nordisk: Down further by 7.23%.
- Procter & Gamble: Continued its decline.
- Pinduoduo & Alibaba: Fell 1% and 2% respectively, with Pinduoduo impacted by Trump’s new tariff on “de minimis” (small parcel) shipments, likely targeting Chinese e-commerce.
- Spotify: Rebounded today after yesterday’s weak performance.
- Nvidia: Led the market with a 2% gain.
- Apple: Underperformed, down over 1%.
- Microsoft & Meta: Both initially saw flat/slight declines but announced exceptionally strong after-hours earnings that are expected to reverse these trends.
- HSBC: Down 5% due to Chinese real estate exposure.
- Healthcare: Showed some rebound from yesterday’s lows.
Key Market Drivers & News
1. Trump’s Trade Actions & Diplomatic Engagements:
- South Korea Talks: President Trump announced on Truth Social a “very busy day” of trade talks, including a meeting with the South Korean trade delegation (led by Deputy PM and Minister of Economy and Finance, Koo Yun-chul). Trump stated he wanted to hear what South Korea would “offer to bring down the 25% tariff” imposed on them. Discussions are expected to involve investments in US shipbuilding (Master’s project), semiconductors, LNG, and beef. Samsung’s Lee Jae-yong is also in the US.
- Pakistan Oil Deal: Trump announced a massive oil field development agreement with Pakistan, potentially to pressure India and lower US energy prices.
- Copper Tariffs: Trump announced a 50% tariff on semi-finished copper products (down from initial 50% on all copper) effective August 1st, causing copper prices to plummet nearly 20% today. Raw materials and scrap copper are exempt. This move aims to benefit US power grids and EV infrastructure by encouraging domestic sourcing.
- “Bill” to Other Nations: Trump warned that he will send “bills” (letters) to other nations not involved in current trade negotiations on August 1st, indicating that those countries will face new tariffs.
- “De Minimis” Tariffs: Tariffs on small package shipments (“de minimis”) are confirmed to take effect at the end of August, targeting China.
- India & Brazil Tariffs: Trump announced administrative orders for 40% additional tariffs on Brazil (totaling 50%) and 25% on India (with potential for higher if they continue supporting Russia), linking these to their BRICS membership and perceived anti-dollar stance. The Indian Rupee saw a significant decline.
- Skepticism on Trade Deal Funds: Doubts are growing among non-US media reports about whether the pledged investment figures from Japan ($550 billion) and the EU ($600 billion) will materialize as direct cash injections or binding commitments, raising questions about the true financial impact.
2. US Economic Data & Fed Decision (FOMC):
- Q2 GDP (Advance Estimate): Annualized GDP rose to 3.0% in Q2, rebounding from -0.5% in Q1. However, this was largely driven by a significant reduction in imports. Private final sales to domestic purchasers (a measure of core consumer spending) increased only 1.2%, down from 1.9% in Q1 and the weakest since 2022, indicating slowing consumer demand despite strong employment.
- Core PCE Inflation: The core PCE price index (excluding food and energy) rose 2.5% in Q2, still above the Fed’s 2% target. Trump immediately called for rate cuts based on the 3% GDP figure.
- FOMC Decision: The Fed kept interest rates unchanged at 4.25-4.5%. No explicit signal for future rate cuts was given. The statement acknowledged a “slowdown in the pace of economic activity growth in the first half of this year,” a slight change from June’s “solid pace.”
- Dissents: Notably, Christopher Waller and Michelle Bowman dissented, voting for a rate cut. Adriana Kugler was absent due to health reasons. This marks the first time since 1993 that multiple Fed officials have dissented against a rate hold, potentially signaling growing internal division. Powell downplayed dissents as a healthy part of debate.
- Powell’s Press Conference: Powell emphasized that while economic activity has slowed, the labor market remains historically strong, though it faces downside risks. He stated that the decision to cut rates in September is not predetermined, and the Fed will assess upcoming employment and inflation data. He also noted that tariff impacts are gradually influencing goods prices, requiring cautious evaluation.
Company-Specific News & Earnings Highlights
- Meta Platforms (META): Soared over 10% in after-hours trading. Q2 Revenue jumped 22% YoY to $47.52 billion (well above consensus). Diluted EPS surged 38% to $7.14 (significantly beating $5.xx consensus). Ad revenue surpassed expectations, and Reality Labs reported a smaller loss than anticipated ($4.5 billion). Active users continued to grow. Strong Q3 revenue guidance ($50.5 billion at the high end) and increased capital expenditure to $72 billion signal significant AI investment.
- Microsoft (MSFT): Exploded 7% in after-hours. Q4 Revenue grew 18% to $76.44 billion, and EPS rose 24% to $0.65 (beating $0.37 consensus). Azure and other cloud services (including OpenAI collaboration) saw exceptional 39% growth (faster than Google’s 32%). Productivity and business processes grew 16%, and personal computing (including gaming) grew 9%, showing broad-based strength.
- Qualcomm (QCOM): Down 4% in after-hours. Q3 Revenue grew 10% YoY to $10.37 billion, adjusted EPS up 19% to $2.77. However, smartphone segment growth (7%) was disappointing, affected by slowing Apple-related sales. Automotive (21%) and IoT (24%) showed strong growth. CEO Cristiano Amon noted strong demand for Meta Ray-Ban glasses, positively impacting IoT. Qualcomm aims to reduce Apple dependency by focusing on automotive. Q4 guidance missed consensus, contributing to the decline.
- Robinhood Markets (HOOD): Up 0.47% after earnings. Q2 Revenue rose 45% to $989 million, adjusted EPS up 42%, beating estimates. Brokerage revenue jumped 65%, and Gold paid subscribers increased 76%. Strong retail investor net buying, record option market participation (over 20% retail share), and positive analyst outlook (“golden age for brokerages”) were noted.
- Coinbase (COIN): Collaborating with JPMorgan Chase, allowing direct linkage of Coinbase wallets to JPMorgan bank accounts. Starting next year, Chase credit cards can be used to fund crypto wallets and convert reward points to crypto, marking a significant step in institutional crypto integration.
- Vertiv Holdings (VRT): Up 1.03%. Reported 15% YoY organic order growth, 35% revenue growth, and 42% adjusted EPS growth, confirming continued strong performance despite broader crypto market concerns.
- Palantir Technologies (PLTR): Down 5.58% following a Wall Street Journal report about its ongoing negotiations to acquire Israeli cybersecurity firm Cyberreason for $20 billion, highlighting increasing demand in the cybersecurity market.
- SoFi Technologies (SOFI): Down over 2% today after announcing a $1.5 billion stock offering, capitalizing on its recent strong performance.
- Blackstone (BX): Property head Wesley LeRoy passed away due to a shooting at its Park Avenue headquarters, an unfortunate event impacting the firm.
- Starbucks (SBUX): Evercore analyst suggests recovery could take “several years.” CEO Brian Niccol indicated focus on store remodels and system transitions over immediate profit. New beverage trials (e.g., coconut water) are being launched in NYC, but consumer reception remains uncertain.
- Amazon (AMZN): Signed a 5-year licensing deal with the New York Times to use its data for AI model training.
- Apple (AAPL): Dropped amid news that four key personnel left for Meta.
- Tesla (TSLA): Down 0.67%. News of LG Energy Solution’s battery supply contract to Tesla, further solidifying battery supply chains.
Upcoming Events (Tomorrow – August 1st)
- Key Earnings:
- After Market Close: Apple, Amazon.
- Before Market Open: CVS Health, Roblox.
- Economic Data: Weekly Initial Jobless Claims, Personal Consumption Expenditures (PCE) Price Index (crucial inflation gauge).
Important Notice:
This content is for informational purposes only and does not constitute financial advice. Stock market investing carries significant risks. Past performance is not indicative of future results. Conduct your own research and consult a qualified advisor.