Equities Stall as Early Enthusiasm Ebbs; Amazon, Apple Earnings Due

Economic

Stocks

Summary:

Earlier economic data from the Commerce Department report showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify in the coming months.

U.S. stocks closed lower on Thursday as early gains faded, following the latest round of corporate earnings and economic data, as investors awaited results from megacaps Amazon and Apple due after the closing bell.

Microsoft (MSFT.O) shares rose 3.5% after it posted a strong earnings report and briefly surpassed the $4 trillion market cap threshold, becoming only the second publicly traded company to ever touch the milestone after Nvidia (NVDA.O).

Meta Platforms (META.O) surged 11.3% to close at a record high of $773.44 as AI-driven growth in its core ad business powered a bullish revenue forecast.

Still, other AI-related names were weaker on the session. Names such as chipmakers Broadcom (AVGO.O), which lost 2.9%, and Nvidia, off 0.8%, weighed on the PHLX semiconductor index <.SOX>. The chip index dropped 3.1% for its biggest daily percentage decline since April 16.

"Looking at the market action today, you have haves and have-nots, and so you have a couple tech companies, like a lot of the semiconductor-related and semi-cap equipment-related stocks are doing pretty poorly," said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management in Lynnfield, Massachusetts.

"But then, of course, Microsoft is doing pretty well, and the same thing with Amazon and Meta, which are doing really well."

Of the 297 companies in the S&P 500 that have reported earnings through Thursday morning, 80.8% have topped analyst expectations, according to LSEG data, compared with the 76% beat rate over the past four quarters.

After the closing bell, Amazon shed 2.6% in extended trade after reporting quarterly results.

The Dow Jones Industrial Average (.DJI) fell 330.30 points, or 0.74%, to 44,130.98, the S&P 500 (.SPX) lost 23.51 points, or 0.37%, to 6,339.39 and the Nasdaq Composite (.IXIC) lost 7.23 points, or 0.03%, to 21,122.45.

The S&P 500 had risen as much as 1% and the Nasdaq as much as 1.5% earlier in the session. The Nasdaq has not logged a move of at least 1% in either direction since July 3 while the S&P last recorded a daily 1% move on June 24.

Investors will now eye Friday's non-farm payrolls report and a looming tariff deadline, as U.S. President Donald Trump was expected to issue higher final duty rates for countries that have not reached an agreement, although Mexico was granted a 90-day reprieve.

U.S. stocks have rallied after a sharp selloff that began in early April after Trump announced a bevy of sharp tariffs, only to rebound as deals have been struck with many trading partners on duty levels.

For the month, the S&P 500 gained 2.17%, the Nasdaq rose 3.7%, and the Dow climbed 0.08%. The Dow, S&P 500 and Nasdaq recorded their third straight monthly gain.

Drug stocks were also weaker after the White House said Trump sent letters to the CEOs of 17 major pharmaceutical companies, urging immediate action to lower the cost of prescription drugs for Americans. The NYSE Arca pharmaceutical index (.DRG) slumped 2.9%, its biggest drop since May 14 and fourth straight session of declines.

Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE, and by a 1.98-to-1 ratio on the Nasdaq.

The S&P 500 posted 35 new 52-week highs and 28 new lows while the Nasdaq Composite recorded 70 new highs and 141 new lows.

Volume on U.S. exchanges was 19.65 billion shares, compared with the 18.01 billion average for the full session over the last 20 trading days.

Source: Reuters

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Manuel

Commodity

Energy

Oil fell as broader markets weakened on worse-than-expected US inflation data and crude traders cashed out after prices reached a six-week high.

While West Texas Intermediate slipped 1.1% on Thursday to settle below $70 a barrel, snapping a three day rally, prices are largely still range-bound as traders await clearer signals on balances for supply and demand.

“Investors are just being cautious not to overextend the rally until we have more clarity on: one OPEC, two Russia — through the weekend,” as well as the looming Aug. 1 US tariff deadline, said Frank Monkam, head of macro trading at Buffalo Bayou Commodities.

US President Donald Trump said he would impose a tariff on India’s exports and a penalty for its energy purchases from Russia from Aug. 1, the latest in a series of comments in which he expressed his anger at the lack of ceasefire in Ukraine. Oil Hits Pause as Traders Parse Trump’s Russia Threats, US Data_1

Oil Hits Pause as Traders Parse Trump’s Russia Threats, US Data_1

While the market impact of disrupting Indian purchases could be significant, as Moscow would have to find new buyers if it loses one of its largest customers, the relatively muted price movements offer a sign that there’s little expectation Trump will follow through for now.

It’s the latest sign of an oil market that increasingly only reacts when there is a meaningful disruption to supply. While Trump has repeatedly threatened steps that might hurt output in producer nations from Venezuela to Iran and Russia since taking office, there’s so far not been a substantial hit to global supply, even when the US bombed Iran’s nuclear facilities.

India’s refiners are seeking clarity from the government in New Delhi. A senior executive at a major processor said his company would try and source more crude from the Middle East and Africa, while also looking to the government for guidance on how it should proceed.

“Finding a replacement of Russian crude on the global market would be difficult,” Goldman Sachs analysts including Yulia Zhestkova Grigsby wrote in a report. “Although the exact details of potential economic penalties remain unclear, investors focus on the risks from a potential 100% tariff on countries that import Russian oil.”

Trump’s threat came hours before the US issued its most sweeping Iran-related sanctions in seven years, targeting an international shipping network controlled by prominent oil trader Hossein Shamkhani, whose father is a senior adviser to Supreme Leader Ayatollah Ali Khamenei.

While those designations marked the biggest escalation in measures since Trump returned to office, US officials said they don’t expect the restrictions to lead to any sustained disruption to global oil markets, noting that much of the oil sold by the network goes to China.

Collectively, the measures are a reminder of the type of headline-driven volatility oil traders are currently having to grapple with.

Trump has also imposed an Aug. 1 deadline for nations to settle on trade deals with the US — with South Korea and the European Union recently reaching agreements.

Those risks have made it harder for some of the world’s top physical traders to make money. Shell Plc’s Chief Executive Officer Wael Sawan said on Thursday that his company had adopted a risk-off approach in crude in the previous quarter as a result of the larger swings, echoing comments from the bosses of other oil majors in recent weeks.

Source: Bloomberg

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Adam

Economic

The Federal Reserve on Wednesday kept interest rates unchanged for the fifth consecutive meeting as it remains under intense pressure from President Donald Trump and his allies to lower borrowing costs.

The central bank left its benchmark lending rate at a range of 4.25% to 4.5%, where it has been since December, but the decision wasn’t unanimous. Fed Governor Christopher Waller and Fed Vice Chair for Supervision Michelle Bowman cast dissenting votes, marking the first time more than one Fed governor has dissented since 1993. They preferred a quarter-point rate cut instead, the Fed said.

The division among policymakers underscores the extraordinary and uncomfortable moment the Fed is in: Central bankers want to wait a little while longer for additional data to see how the US economy is faring during Trump’s trade war, but they’re facing repeated attack from the White House because of their wait-and-see strategy.

Fed Chair Jerome Powell said in a post-meeting news conference that these are still the “early days” of Trump’s tariffs — and their effects on the US economy — meaning that “there are many, many uncertainties left to resolve,” he said.

Here are takeaways from the Fed’s latest decision to hold rates steady as the central bank faces intense pressure to reduce borrowing costs, even from within.

Powell on the dissents and possible rate cuts

A Fed governor dissenting on a policy decision is rare, and even more so when two of them do it at the same time. But Powell didn’t characterize that as an issue.

“On the dissents, what you want from everybody and also from a dissenter is a clear explanation of what your thinking is and what the arguments are you are making. We had that today,” Powell said. “Basically, this was a good meeting around the table where people thought carefully about this and put their positions out there.”

Bowman and Waller could share their views on why they dissented as soon as Friday morning, after the customary post-meeting blackout.

Even though the Fed is standing pat for now, the central bank is widely expected to lower rates at least once this year, and as many as two times by year’s end, according to futures. This year’s first rate cut could some as soon as September, some investors say.

Powell said there are still too many things up in the air when it comes to the economy to know whether it makes sense to resume rate cuts in the fall. “We have made no decisions about September,” he said.

For now, Fed policymakers are waiting to see if the effects of Trump’s tariffs on inflation prove to be mild and if the economy continues to weaken. Those two developments would give the Fed the green light to resume rate cuts and ease some pressure off the economy.

“Most in the (Fed’s rate-setting) committee think it will be appropriate to cut rates fairly soon, but they might be disagreeing over exactly how much evidence they need or how comfortable they have to be before they start cutting rates again,” William English, a former senior Fed adviser, told CNN.

Powell on the labor market

The job market has been a pillar of strength for the US economy for years, but it’s not clear how much longer that resilience will persist as tariffs start to take a bigger bite.

In addition to taming inflation, the Fed is also responsible for protecting the labor market.

Powell reiterated repeatedly Wednesday that the labor market remains in good shape, but said “you do see a slowing of job creation” and some “downside risk,” meaning a turn for the worse.

And it’s not just Waller and Bowman who have doubts over how much longer the labor market can keep its ahead above water without any rate cuts.

“I wouldn’t want to see more weakness in the labor market,” San Francisco Fed President Mary Daly said earlier this month at an event in Idaho. “Which is why you can’t wait forever.”

Powell said officials are looking at various factors of the labor market such as demand for workers and the supply of workers, which is being affected by Trump’s ongoing crackdown on immigration.

Powell on the renovation and housing

Trump hasn’t let up with his monthslong, insult-laden pressure campaign against Powell.

The president raised the temperature earlier this month when he and his allies seized on the Fed’s $2.5 billion renovation of its headquarters in Washington, DC. They said the Fed, with Powell at the helm, has mismanaged the project, seeing it as a potential legal opening to oust Powell. Last week, Trump toured the renovation site and at one point even feuded with Powell, on camera, over the total cost of the project.

Powell said it was “a nice visit with the president,” adding that “he really wanted to see was us getting this construction completed as soon as possible.”

“That is our focus. And that’s what we are going to do,” he said.

Since then, Trump has backed off from his criticism of the renovation project. On Monday, he even said he will “greatly miss” Powell, whose term as Fed chair ends in May 2026.

Trump is still calling on the Fed to lower rates, but instead of saying it drove up the federal government’s debt servicing costs, he’s now pointing to the effects of elevated interest rates on the housing market.

“‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump wrote Wednesday on his social media platform.

However, the Fed cutting rates will not be the silver bullet that fixes the housing market, which is still grappling with the longstanding issue of not enough homes on the market. And last year, after the Fed began to lower interest rates, mortgage rates climbed instead.

On the housing market, Powell said “there are other things going on housing sector, and one of those is … a long-term housing shortage.”

Powell on the latest GDP report

The Fed’s decision comes the same day new data showed underlying momentum in the economy is sputtering.

The Commerce Department earlier on Wednesday reported that gross domestic product, the broadest measure of economic output, registered an annualized rate of 3% in the second quarter. That figure beat economists’ expectations and was a sharp rebound from the first quarter, when surging imports as businesses tried to get ahead of tariffs prompted GDP to decline at a 0.5% rate.

But that strong headline figure masks underlying weakness buried in the details of the GDP report, and even the Fed noted that in its latest policy statement.

“Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” Fed officials wrote.

A key gauge of demand in the economy — real final sales to private domestic purchasers — expanded at a 1.2% rate in the April-through-June period, down from 1.9% in the beginning of the year.

“We expected the GDP data that we got this week and I think it’s still a little bit difficult to interpret because you have these massive swings in net exports,” Powell said.

Source: cnn

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Commodity

The United States is planning to restrict scrap copper exports from 2027, requiring that at least 25% of so-called “high-quality” scrap be retained for domestic use.

In the near-term the measure is unlikely to have much impact as the U.S. already consumes more than 40% of the copper scrap it generates, analysts say.

HOW TO POLICE AN OPAQUE INDUSTRY

Industry sources say much will depend on the definition of "high-quality" and question whether any planned restrictions can be enforced in notoriously opaque scrap metal markets.

"Practically speaking, this would be probably pretty tough to police ... the whole business of scrap collection, recycling, reprocessing is maybe not the most transparent of businesses," said Duncan Hobbs, research director at commodity merchant Concord Resources.

There are also concerns that the rule could distort the market if a few large players attempt to dominate the supply of qualifying scrap, or if the 25% threshold is applied unevenly across producers.

WHAT HAPPENS TO COPPER SCRAP GENERATED IN THE U.S?

According to the U.S. Geological Survey (USGS), recycling contributed 870,000 metric tons of copper to U.S. supplies last year.

The United States exported nearly 957,000 metric tons of copper scrap and waste last year, of which more than 40% was shipped to China, according to data from Trade Data Monitor.

Analysts estimate that amount of scrap would yield roughly 580,000 tons of copper metal, which could cut its imports of the metal used in the power and construction.

HOW MUCH COPPER DOES THE US IMPORT?

TDM data shows more than 921,000 tons of copper metal and alloys were shipped to the United States last year. The bulk of that - 70% - was imported from Chile, while 17% came from Canada.

"The U.S. could theoretically be self-sufficient if there were no copper scrap and concentrate exports," said Bank of America analyst Michael Widmer.

Source: Reuters

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Adam

Forex

The dollar is wrapping up its best month of 2025 as the world’s largest economy powers ahead and President Donald Trump inks trade deals.

The Bloomberg Dollar Spot Index has risen 2.5% in July, the only positive month since President Donald Trump was sworn into office back in January. While Federal Reserve officials have said growth is moderating, data showed this week showed the US economy expanding at a 3% pace in the second quarter, a solid print given the backdrop of changing trade policy.

Fed Chair Jerome Powell also hinted on Wednesday that interest rates may stay elevated for longer, helping push the dollar index higher and trimming overall losses for the year to 7%. The greenback rose on Thursday, extending a five-day winning streak.

“After a period of significant weakness, we have seen the dollar find some bids given resiliency in US economic data, progress on tariff negotiations, and exhaustion in selling,” said Nathan Thooft, a senior portfolio manager at Manulife Investment Management.

Dollar Wraps Up Best Month of Trump’s Term as Economy Holds Up_1

Dollar Set for Best Month This Year | US currency rebounds after six months of losses.

The Bloomberg dollar index rose to day’s high after data showed that Fed’s preferred measure of underlying inflation increased in June at one of the fastest paces this year, underscoring limited progress on taming inflation.

Interest-rate swaps now show just a 40% chance the Fed reduces rates in September, and an 80% chance of a move in October — which was seen as a sure thing before Powell spoke on Wednesday.

The rebound in the dollar marks a reversal, even if it turns out to be brief, in what’s been a historically bad year for the currency. The economic turmoil created by Trump’s trade war and constant policy U-turns, along with a tax-cut bill that has pledged to expand the US budget deficit, has undermined the greenback’s status as the ultimate reserve currency.

The dollar’s plunge also reflected a rush among non-US investors to hedge against further declines in the currency. Standard Chartered Plc chief financial officer Diego de Giorgi said in an interview earlier Thursday that a lot of the bank’s large corporate clients and wealthy individuals put hedges in place last quarter to protect against further dollar weakness.

What Bloomberg’s Strategists Say...

“The US dollar is poised for further gains in the weeks ahead. Resilient US economic data, a Federal Reserve that isn’t ready to cut interest rates, and a wave of trade agreements are all feeding into a stronger greenback.”

— Nour Al Ali, Macro Markets & Squawk. See MLIV for more analysis.

The next jobs report on Friday will give investors another reading on how the US economy is faring. Powell also flagged that there are several economic reports, including two months of data on employment and inflation, that might shift their thinking before the September meeting.

The soaring US stock market is also lending support to the greenback. With the S&P 500 on track for a third month of gains, that’s pulling in money from investors around the world. As well, blockbuster earnings from big tech companies underscore America’s dominance in the race for artificial intelligence.

While some had feared during the selloff that international investors would ditch their US holdings, recent data suggests that hasn’t happened. Foreign investor holdings of Treasuries climbed in May, and US dollar’s share of allocated foreign-exchange reserves held by global monetary authorities was steady in the first quarter of 2025.

Dollar Wraps Up Best Month of Trump’s Term as Economy Holds Up_2

Dollar Recovery | Bloomberg Dollar Index is poised for its first monthly gain this year

“To keep shorting the dollar against a currency basket, we’re going to need something drastic from Trump or a US-centric slowdown,” said Ben Ford, FX strategist at Macro Hive.

Another theme boosting the case for the dollar versus other currencies, like euro or yen, is that Trump extracted a trade deal that is more beneficial for the US than its trading partners. The euro has fallen almost 3% against the dollar this month, with German industry leaders warning tariffs will make Europe less competitive.

The accord “reinforces the old paradigm of US dominance,” said Brent Donnelly, president of Spectra Markets and a veteran FX trader. “However you slice and dice the details, the trade deal appears to be an embarrassment for Europe.”

The yen and the British pound were the worst performers in the Group of 10 against the greenback in July, with both currencies losing 3.5% or more. The Canadian dollar fell the least.

For the months ahead, options shows that traders are expecting modest gains. That’s in contrast in May and June, when they were betting on more depreciation.

Source: Bloomberg

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Manuel

Economic

Political

President Trump on Thursday said he was granting Mexico a 90-day reprieve on higher tariffs, saying he would extend Mexico's current tariff rates to allow for more time for negotiations.

"We will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer," Trump wrote on social media after talking with Mexico's president, Claudia Sheinbaum.

The extension avoids a further escalation with the US's largest trade partner as Trump's sweeping tariffs get set to go into effect Friday. In the days and hours before his tariffs are set to come into full force, Trump has unleashed a flurry of deals and trade moves.

Those include a new pact with South Korea and an extension of Mexico's current tariff rates for another 90 days. The South Korea agreement includes a 15% tariff rate on imports from the country, while the US will not be charged a tariff on its exports, according to Trump's post on Truth Social.

Deals were also expected with Thailand and Cambodia after Monday's ceasefire. A deal with Taiwan was also reportedly close.

On Wednesday, the president made other moves, including threatening a 25% tariff on goods from India and slapping 50% tariffs on many goods from Brazil — but exempting some of the country's key exports.

Trump also signed several orders Wednesday:

One order imposes 50% tariffs on semi-finished copper products starting Aug. 1, excluding copper scrap and input materials.

Another ends the de minimis exemption on low-value imports under $800, thereby applying tariffs from Aug. 29.

The third order targets Brazil, but it exempts key US imports like orange juice and aircraft parts that benefit Embraer (ERJ).

Meanwhile, Treasury Secretary Scott Bessent said on Thursday that the US and China now have "the makings of a trade deal," days after the countries wrapped up a third round of talks.

Also, the US and EU are racing to lock in the final details of their agreement.

Source: Yahoo Finance

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Adam

Economic

In just over two hours last night, investors got a clear snapshot of the U.S. economy and markets heading into the second half of 2025. It began with the Federal Reserve holding interest rates steady, followed by earnings from Microsoft and Meta.

Starting with the Fed: the U.S. central bank has kept rates elevated for months to contain inflation and maintain flexibility in case the economy struggles with Trump administration policies. President Trump, on the other hand, wants lower rates to stimulate growth, reduce the dollar’s strength, ease federal financing, and support his broader economic agenda. In typical Trump fashion, he blasted the Fed as “morons” running a “sadomasochistic” policy, and again targeted Chair Jerome Powell—especially after Powell’s comments last night.

Markets expected rates to remain in the 4.25%–4.50% range—and they did. But investors were also looking for Powell to signal a likely cut in September. That didn’t happen. Powell struck a more cautious tone than expected. In central bank jargon, that’s “hawkish,” the opposite of “dovish.” So hawkish, in fact, that odds of a September cut dropped below 50% for the first time in weeks.

Economists note the Fed’s message shifted from “we’re waiting for positive data to cut” to “we need convincing evidence before we cut.” It’s a subtle but meaningful change. Two FOMC members, Michelle Bowman and Christopher Waller, pushed for a cut at this meeting, which was anticipated given their prior comments. Bank of America summed it up: the theme of the night was “effective.” Powell stressed that as long as the economy holds up, keeping rates steady is more effective than cutting too soon and risking an emergency hike later. In short, the Fed remains firmly in risk-control mode.

Hawkish signals usually dampen equity sentiment—but not last night. Why? Microsoft and Meta delivered blowout earnings that overshadowed rate worries. After-hours trading showed Microsoft up 8% and Meta soaring 11.5%. These two giants—worth more together than the entire French stock market—lit a fire under global markets. Futures turned sharply higher, and European and Asian indexes followed suit. The driver? Explosive growth in AI adoption, where Microsoft and Meta dominate thanks to their vast ecosystems.

Elsewhere, the U.S. signed a 15% tariff deal with South Korea, matching the EU agreement. But tensions with India are rising as Washington moves forward with a 25% surcharge and sanctions over Russian oil imports. A compromise may come this week, but the tone is hardening. Relations with Brazil are also strained; Washington hit the country with a 40% tariff hike to force compliance. Meanwhile, China’s latest PMI data signaled industrial contraction and near-flat services activity, while Japan’s central bank held rates steady and raised inflation forecasts.

The earnings calendar is also in overdrive—July 30 ranks among the busiest days of the year for corporate reports, setting up more market-moving news.

In Asia, Japan’s Nikkei 225 snapped a four-day losing streak, gaining 1%. South Korea and India, under tariff pressure, slipped 0.5%. Hong Kong’s Hang Seng fell 0.6%, and Australia edged down 0.1%. European futures opened higher but trimmed some overnight gains.