Two votes against (calling for a 25bps rate cut), one member absent, and nine votes in favor of keeping rates unchanged.
Powell downplayed the chance of a rate cut in September. For the first time, futures markets now see over a 50% chance of no cut. The market dropped sharply. However, it still looks more like random swings for now. Earnings from MSFT and META came after the close. AAPL and AMZN reports tomorrow after the close will be key.
The U.S.–China trade truce has been extended for another 3 months. Talks will continue. The Fed will announce its policy decision this afternoon. The market expects no rate change this time, with a possible cut starting in September.
U.S. Q2 GDP was sharply revised up to 3% (vs. 2.5% expected, -0.5% last quarter). July ADP jobs report was much stronger than expected. Overall, the environment suggests tariffs are having little impact, inflation is still low, the job market is strong, and the economy is doing well.
MSFT and META reported earnings after the close. The market continues to trade in a narrow range near highs, with SPY flat for a fourth day between $635 and $640.
Big company earnings remain mixed. Of 15 S&P 500 firms that reported after hours yesterday, only 5 saw small gains. Former leaders like V (-2%), BKNG (-2%), and STX (-6%) fell. SBUX rose 5%, EA gained 3%.
Other highlights: Cybersecurity firm PANW dropped 6% after plans to acquire CYBR for $26B. Healthcare company HUM raised its full-year outlook (+10%). MRVL’s chip for Microsoft will enter production by the end of next year; its stock rose 9% premarket. Apparel brand VFC beat earnings and jumped 20% premarket.
Index movement is calm, but individual stocks show clear signs of rotation. Many past winners are seeing profit-taking. With more major tech earnings coming in the next few days, the focus remains on results.
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