Market Recap – Wednesday, July 30, 2025
Trade Uncertainty and Fed's Hawkish Tone Weigh on Market Momentum
Stocks were mostly lower today after the S&P 500 and Nasdaq broke their streak of gains, following new record highs earlier in the week. The S&P 500 posted its second consecutive day of losses, while the Nasdaq eked out a modest gain. Laggards included sectors like energy, copper, pharma, steel, and trucking, while outperformers included managed care, biotech, and casual diners. Big tech stocks saw losses, with Tesla and Meta standing out among the decliners.
In the trade front, President Trump announced new tariffs on India and Brazil, and imposed a universal 50% tariff on copper. These developments added some volatility to the market, though investors focused more on the uncertainty removal aspect of trade negotiations than the potential headwinds from the increased tariff rates. In economic data, the July ADP payroll report showed stronger-than-expected private job growth, and Q2 GDP came in stronger than expected at 3.0% quarter-over-quarter.
The July FOMC meeting concluded with the Fed holding rates steady, but the tone in Chairman Powell’s press conference was slightly hawkish, pushing expectations for a rate cut in September down to 50% from 60%. The GDP report also showed a boost from consumer spending, but concerns about inflation persisted, particularly in services.
Here’s Our Take:
The market took a breather today after a strong rally earlier in the week, with some sectors underperforming while others like biotech and managed care saw gains. The US economy remains resilient, with positive GDP and payroll data supporting the bullish narrative, but rising tariff pressures and a hawkish Fed tone could create headwinds for the broader market. While AI momentum and strong earnings remain tailwinds, trade uncertainty and inflationary pressures may continue to weigh on sentiment in the second half of the year. We will be closely watching the next round of earnings from the Mag 7 tech giants and the September FOMC meeting for further direction.
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