Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
- The Dow Jones saw very little movement in pre-Fed trading.
- The Fed’s rate call is locked in as a hold, but markets are looking for signs of a September cut.
- Market tensions continue to coil ahead of the August 1 tariff deadline.
The Dow Jones Industrial Average (DJIA) was little changed through the early Wednesday session, trading in a tight circle around 44,600 ahead of the Federal Reserve’s (Fed) latest interest rate decision. Another rate hold is a foregone conclusion for the Federal Open Market Committee (FOMC) as knock-on effects from tariffs pose a credible threat to the United States’ (US) inflation outlook.
US Gross Domestic Product (GDP) growth came in stronger than expected, with the US economy growing 3.0% on an annualized basis through the second quarter, outpacing the 2.4% forecast. Investors remain fixed on the Fed, however, and equity markets remained largely unchanged post-GDP release.
Key “Magnificent Seven” earnings will be posted on Wednesday after the closing bell. Social media giant and aspiring tech giant Meta Platforms (META), alongside software monolith Microsoft (MSFT), will be posting their latest quarterly earnings reports.
Read more stock news: UPS stock drops back to covid lows as Bank of America cuts price target
What a difference 24 hours makes
On the trade and tariff front, the Trump administration has done an about-face within the span of a single day. On Tuesday, the Trump team proclaimed that the US is nearing a conclusion in trade talks with China and that a wave of successfully negotiated trade deals was earmarked for imminent announcement. On Wednesday, the tone has completely changed: US negotiators abruptly ended trade talks with China, with US President Donald Trump reaffirming his self-imposed deadline of August 1 for the restart of global reciprocal tariffs. Trump also announced a flat 25% tariff on all goods bound for the US from India. Trump also reiterated his intent to start a “penalty” tariff on any country that buys Russian Crude Oil products if Russia doesn’t solve its war in Ukraine within the next ten days.
Dow Jones five-minute chart
Dow Jones daily chart
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Next release:
Wed Jul 30, 2025 18:00
Frequency:
Irregular
Consensus:
4.5%
Previous:
4.5%
Source:
Federal Reserve
