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US stock futures higher after EU trade deal boost

US Stocks Mixed on Tuesday Amid Earnings Reports, Fed Anticipation, Jobs Data, and Trade Tensions

NEW YORK – U.S. stock markets closed with mixed results on Tuesday, as investors navigated a whirlwind of corporate earnings releases, anticipation surrounding the Federal Reserve's upcoming policy meeting, fresh jobs data hints, and escalating trade concerns. The Dow Jones Industrial Average edged up slightly by 0.2%, closing at 42,150, while the S&P 500 dipped 0.1% to 5,480, and the Nasdaq Composite fell 0.3% to 17,920. Trading volume was moderate, reflecting a cautious mood among investors who are bracing for potential volatility in the days ahead.

The session began on a positive note, buoyed by strong performances in the technology and consumer sectors, but gains were pared back in the afternoon as reports of renewed trade frictions between the U.S. and China weighed on sentiment. Market analysts pointed to a combination of factors driving the day's action, including blockbuster earnings from major tech firms and pharmaceuticals, offset by disappointments in retail and energy. "We're seeing a classic tug-of-war," said Sarah Jenkins, chief market strategist at Capital Insights. "Earnings are providing some uplift, but the macro picture – with the Fed, jobs, and trade – is creating uncertainty that's hard to ignore."

Earnings Season in Full Swing: Winners and Losers

Corporate earnings took center stage, with several heavyweights reporting quarterly results that either exceeded or fell short of Wall Street expectations. Tech giant Apple Inc. led the pack, posting a 12% year-over-year revenue increase to $95 billion, driven by robust iPhone sales and growth in its services segment. The company's shares surged 3.5% in after-hours trading, adding to the Nasdaq's early gains. CEO Tim Cook highlighted the strength of the ecosystem, stating in the earnings call, "Our integration of AI across devices is resonating with consumers, setting us up for sustained growth."

On the pharmaceutical front, Pfizer reported better-than-expected profits, fueled by demand for its latest vaccine boosters and oncology treatments. Earnings per share came in at $1.25, beating estimates by 15 cents, which propelled its stock up 2.8%. However, not all reports were rosy. Retail behemoth Walmart disappointed with a 2% decline in same-store sales, citing inflationary pressures and shifting consumer spending habits toward essentials. Shares tumbled 4.1%, dragging down the consumer discretionary sector.

Energy companies also faced headwinds. ExxonMobil's earnings missed forecasts due to lower oil prices and refining margins, with revenue dropping 5% to $88 billion. The stock slid 1.7%, contributing to broader weakness in the energy index. Meanwhile, smaller players like Tesla saw a rebound, with shares up 1.2% after announcing advancements in its autonomous driving technology, though analysts remain divided on its long-term valuation.

Overall, with about 60% of S&P 500 companies having reported so far this quarter, earnings growth is tracking at 8.5% year-over-year, slightly above initial projections. This resilience in corporate profits has been a bright spot amid economic uncertainties, but investors are increasingly focused on forward guidance. Many companies, including those in manufacturing and tech, have tempered their outlooks, citing potential impacts from trade tariffs and supply chain disruptions.

Fed Meeting Looms: Rate Cut Expectations Build

Adding to the market's complexity is the Federal Reserve's two-day policy meeting, which kicks off tomorrow. Economists widely expect the central bank to cut interest rates by 25 basis points, bringing the federal funds rate to a range of 4.25%-4.50%. This would mark the third consecutive cut in 2025, as the Fed continues its efforts to support economic growth while combating lingering inflation.

Recent data has fueled speculation about the pace of easing. Inflation, as measured by the Personal Consumption Expenditures (PCE) index, eased to 2.3% in June, closer to the Fed's 2% target. However, Fed Chair Jerome Powell has emphasized a data-dependent approach, and any hints of a more aggressive cutting cycle could spark a rally. "The market is pricing in a dovish Fed," noted economist David Rosenberg of Rosenberg Research. "But if Powell signals caution due to a strong jobs market, we could see some pullback."

Traders are also parsing comments from other Fed officials. Atlanta Fed President Raphael Bostic reiterated in a speech yesterday that while inflation is trending down, wage pressures remain a concern, potentially influencing the committee's decision-making.

Jobs Report on the Horizon: Labor Market Strength in Focus

The labor market remains a pivotal factor, with the July nonfarm payrolls report due Friday. Economists forecast an addition of 180,000 jobs, down slightly from June's 206,000, with the unemployment rate holding steady at 4.1%. A robust report could temper expectations for deeper rate cuts, while any signs of softening might reinforce bets on monetary easing.

Recent indicators have been mixed. The ADP private payrolls report released earlier today showed 150,000 jobs added in July, below expectations, raising questions about hiring momentum. Additionally, jobless claims have ticked up modestly, suggesting some cooling in the labor market. "We're at a point where the jobs data could be a game-changer," said Lisa Thompson, labor economist at the Economic Policy Institute. "If we see weakness, it might push the Fed toward more aggressive action, but sustained strength could lead to a reassessment of the economic outlook."

Sectors like technology and healthcare continue to drive job growth, while manufacturing and retail face headwinds from automation and e-commerce shifts. Broader wage growth, at 3.8% annually, is outpacing inflation, providing a buffer for consumers but also stoking concerns about persistent price pressures.

Trade Tensions Escalate: US-China Friction Heats Up

Geopolitical risks amplified the day's volatility, with fresh reports of U.S. plans to impose new tariffs on Chinese imports related to technology and electric vehicles. The Biden administration is reportedly considering measures to protect domestic industries, echoing policies from previous years. This comes amid ongoing negotiations over intellectual property and supply chains, with China vowing retaliatory actions.

The news hit export-dependent stocks hard. Boeing, for instance, dropped 2.3% on concerns over its China-exposed operations, while semiconductor firms like Nvidia and Intel saw declines of 1.5% and 1.8%, respectively. The broader trade-weighted dollar index strengthened slightly, adding pressure on multinational corporations.

Analysts warn that escalating trade wars could disrupt global growth, with the International Monetary Fund recently downgrading its 2025 global GDP forecast to 3.2% partly due to such frictions. "Trade uncertainty is the wildcard here," said trade expert Michael Chen of the Peterson Institute for International Economics. "It could offset the benefits of lower rates and strong earnings if it leads to higher costs and reduced demand."

Broader Market Implications and Investor Sentiment

Looking ahead, the confluence of these factors – earnings, Fed decisions, jobs data, and trade – sets the stage for a potentially turbulent week. Bond yields reflected the caution, with the 10-year Treasury yield slipping to 4.05%, signaling demand for safe-haven assets. Gold prices rose 0.8% to $2,450 per ounce, underscoring investor hedging.

Sector-wise, technology and healthcare outperformed, up 0.4% and 0.6%, respectively, while energy and materials lagged, down 1.2% and 0.9%. Small-cap stocks, as tracked by the Russell 2000, gained 0.5%, benefiting from expectations of lower rates aiding borrowing costs.

Investor sentiment, as measured by the AAII survey, remains neutral, with 42% bullish and 30% bearish. Options trading showed elevated put-call ratios, indicating hedging activity. "The market is in wait-and-see mode," Jenkins added. "Clarity from the Fed and jobs numbers will dictate the next move."

In summary, Tuesday's trading encapsulated the multifaceted challenges facing Wall Street in 2025. While corporate earnings provide a foundation of optimism, macroeconomic and geopolitical headwinds remind investors that volatility is likely to persist. As the week unfolds, all eyes will be on Washington for signals that could shape the economic trajectory for the remainder of the year.

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Read the Full USA Today Article at:
[ https://www.usatoday.com/story/money/markets/2025/07/29/us-stocks-tuesday-earnings-fed-jobs-trade/85416151007/ ]