Closing Recap

 U.S. stocks finished mostly lower in a volatile session as the Federal Reserve held interest rates steady and Chair Powell offered a non-committal stance on future cuts, disappointing some investors; the dollar firmed, Treasury yields were mixed, while oil gained and gold slipped ahead of the decision. 

Key Takeaways 

• Stocks Fade After Fed Decision: Major indices gave back early gains to finish mostly in the red after the FOMC held rates and Chair Powell signaled a “wait and see” approach, reducing near-term rate cut odds. 
• Fed Holds, Two Governors Dissent for Cut: The FOMC kept the Fed Funds rate at 4.5% as expected, but notably, Fed Governors Waller and Bowman dissented, formally voting for a rate cut. 
• Rate Cut Odds Dip: After Powell’s press conference, futures markets showed the probability of a September rate cut falling to 50% from 68% earlier. 
• Trump Issues New Tariffs/Orders: President Trump was active, signing executive orders to suspend the “de minimis” exemption for commercial shipments, formalize a 50% copper tariff, and increase tariffs on Brazil to 50%. 
• Economic Data Mixed: Advance Q2 GDP surprised to the upside (+3.0%), while ADP employment also beat forecasts. However, Pending Home Sales fell unexpectedly. 
• Oil Gains on Geopolitical Threats: Crude oil prices climbed as President Trump tightened the deadline for Russia regarding the Ukraine war and threatened secondary sanctions. G
• old Eases, Dollar Firms: Gold prices fell as rate cut hopes were tempered and the dollar strengthened, particularly against the Euro and Yen.

Market Overview

U.S. equity markets experienced a day of consolidation and modest declines as investors parsed a hawkishly-interpreted Federal Reserve policy decision and a steady stream of trade policy actions from the White House. Stocks were in a holding pattern for much of the day, with shallow dips being aggressively bought, a familiar pattern since the April lows. The market’s upward momentum, which has seen the S&P 500 log six consecutive record highs, took a breather today. 

Index	Up/Down	% Change	Last
DJ Industrials	-171.71	-0.0038	44461
S&P 500	-7.91	-0.0012	6362
Nasdaq	31.38	0.0015	21129
Russell 2000	-10.56	-0.0047	2232

The main event was the conclusion of the July FOMC meeting. As universally expected, the Fed held interest rates steady. However, the accompanying statement and Chair Powell’s subsequent press conference disappointed investors hoping for a clear signal of an imminent rate cut. Powell maintained a non-committal, “wait and see” stance, emphasizing that the central bank will be data-dependent. This led to a repricing in interest rate futures, with the odds of a September rate cut falling significantly. A notable feature of the decision was the formal dissent from Fed Governors Waller and Bowman, who both voted for a rate cut, marking the largest number of dissenting governors since 1993 and highlighting the growing internal debate at the central bank. 

Alongside the Fed, President Trump was also making news, signing executive orders that implemented a 50% tariff on copper, increased tariffs on Brazil, and, significantly, suspended the “de minimis” rule that allowed packages under $800 to enter the U.S. duty-free. Economic data was also a factor, with a much stronger-than-expected advance reading for Q2 GDP (+3.0%) and a solid ADP employment report, which likely contributed to the Fed’s patient stance.

Economic Data

Economic data yesterday was stronger than expected, with a surprise beat on Q2 GDP and ADP employment, though pending home sales disappointed. 

• ADP Employment Change (July): +104K (Above +75.5K consensus, vs. -33K prior). 
• Q2 GDP (Advance): +3.0% annualized (Above +2.4% consensus). Final Sales +6.3%. Consumer Spending +1.4%. GDP Deflator +2.0% (below 2.1% est.). Core PCE +2.5% (above 2.3% est.). 
• Pending Home Sales (June): Fell -0.8% m/m (vs. +0.3% consensus). Declined -2.8% year-over-year. 
• Treasury Refunding Announcement: Announced $125B refunding, with plans to keep coupon auction sizes steady. 

Commodities, Currencies, and Treasuries 

Gold prices fell, with August futures down $28.40 (-0.84%) to settle at $3,352.80 per ounce ahead of the FOMC decision. The metal was pressured by a strengthening U.S. dollar and some profit-taking. Crude oil prices climbed, with WTI gaining $0.79 (+1.14%) to settle at $70.00/bbl. The rally was driven by President Trump’s tighter deadline for Russia to end the war in Ukraine and threats of secondary sanctions on buyers of its oil, which stoked supply concerns and overshadowed a surprise build in U.S. crude inventories. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.79	USD/bbl	70
Brent	0.73	USD/bbl	73.24
Gold	-28.4	USD/oz	3352.8
EUR/USD	-0.0129	USD	1.1417
USD/JPY	0.96	JPY	149.4
10-Year Note	0.042	%	0.0437

The U.S. Dollar Index (DXY) strengthened, with the Euro falling below $1.15 and the dollar hitting a multi-week high against the Yen, as the Fed’s cautious stance contrasted with easing by other global central banks. Treasury yields were volatile, dipping from intraday peaks after the Fed’s statement showed two dissents for a cut, but remained higher on the day overall. The 10-year yield finished near 4.37%. Copper futures tumbled on Trump’s 50% tariff announcement.

Looking Ahead 

The market will continue to digest the implications of the Fed’s “hawkish hold” and Chair Powell’s commentary. All eyes now turn to a heavy slate of earnings reports after the bell from tech giants Meta (META) and Microsoft (MSFT), whose results will be critical for market direction tomorrow. Key economic data, including PCE inflation today and the Nonfarm Payrolls report on Friday, will also be intensely scrutinized for their potential impact on the Fed’s “wait and see” approach. The steady stream of tariff news from the White House also remains a key source of potential volatility.