Markets Lose Gains During Big News Week

Market Volatility and Key Developments

On Tuesday, July 29, 2025, the U.S. stock market experienced a mix of highs and lows. The S&P 500 and Nasdaq indexes reached intra-day record highs early in the session but ultimately closed in the red alongside other major indices. The Dow Jones Industrial Average fell by 204 points, or 0.46%, while the S&P 500 dropped 18 points, or 0.30%. The Nasdaq declined by 80 points, or 0.38%, and the small-cap Russell 2000 fell 13 points, or 0.61%.

Despite some positive momentum in trade deals, the progress has not been strong enough to drive the market to new heights. While Q2 earnings reports showed a generally healthy quarter, there are signs of weakness, particularly in non-Big Tech sectors. Investors are also waiting for upcoming monthly jobs data, with June’s JOLTS numbers showing a slight decrease in job openings to 7.4 million from a revised 7.7 million in the previous month.

Fed Policy and Market Expectations

Tomorrow at 2 p.m. ET, the Federal Reserve is set to announce its policy decision. It is widely anticipated that the current interest rate range of 4.25-4.50% will remain unchanged for the fifth consecutive FOMC meeting. However, some analysts believe that at least a couple of Fed members may push for rate cuts, even with an unemployment rate of 4.1% and an inflation rate of 2.7%. This potential divergence could create uncertainty in the market.

Earnings Reports and Company Performance

Several major companies released their Q2 earnings after the market close, offering mixed results:

• Starbucks (SBUX): Brian Niccol’s turnaround efforts were visible in parts of Starbucks’ fiscal Q3 report, but the bottom line did not meet expectations. Earnings per share came in at 50 cents, missing the Zacks consensus of 65 cents. A one-time charge of 11 cents per share contributed to the miss. Revenue was $9.50 billion, surpassing the projected $9.30 billion. Same-store sales underperformed, with a -2% decline in North America, though China saw a 2% growth. Shares initially dropped 2% but later rebounded more than 4%.

• Visa (V): Visa exceeded expectations with earnings of $2.98 per share, compared to $2.86 expected. Revenue reached $10.2 billion, outpacing the $9.87 billion forecast. Payment volume grew by 8% year over year. Despite this, shares fell 3% in after-hours trading.

• Booking Holdings (BKNG): Booking Holdings reported strong Q2 results, with earnings of $55.40 per share, significantly above the $50.59 expected. Revenue reached $6.8 billion, exceeding the $6.56 billion consensus. Gross bookings for the quarter hit $46.7 billion, and the company reaffirmed its full-year revenue guidance.

• Mondelez (MDLZ): Mondelez faced challenges due to rising cocoa prices, which impacted organic growth. However, earnings of 73 cents per share beat estimates by a nickel, and revenue of $8.98 billion surpassed the $8.88 billion expected. Tariffs on imported goods may pose additional risks for the company. Shares remained flat, with a 16% gain year to date.

Market Outlook for Wednesday

Wednesday promises to be a busy day for earnings reports, with several major companies set to release their results. Microsoft (MSFT) and Meta Platforms (META), both part of the "Mag 7" group, will be highlighted after the market close. Other notable companies include Ford (F), Qualcomm (QCOM), and V.F. Corp. (VFC), among approximately 300 others.

In addition to earnings, the private-sector payrolls report from Automatic Data Processing (ADP) will be released in the morning. This data is expected to show a recovery from the weak -33K number reported in June, with a projected increase of +64K for July. Analysts will also monitor wage gains for both job "stayers" and "changers."

The Q2 Gross Domestic Product (GDP) is expected to rebound to +2.3%, reversing the -0.5% decline seen in Q1. Heavy tariff policies earlier in the quarter led to some economic adjustments, but a reprieve in these policies has improved outlooks for certain sectors. Additionally, pending home sales for June are expected to remain positive, though they may show a slight slowdown from the prior month's +1.8% increase.