Fed Day Dawns With Stocks Flat Despite Strong GDP

Published as of: July 30, 2025, 9:13 a.m. ET
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The markets | Last price | Change | % change |
---|---|---|---|
S&P 500® index |
6,370.86 |
-18.91 |
-0.30% |
Dow Jones Industrial Average® |
44,632.99 |
-204.57 |
-0.46% |
Nasdaq Composite® |
21,098.29 |
-80.29 |
-0.38% |
10-year Treasury yield |
4.36% |
+0.03 |
-- |
U.S. Dollar Index |
99.28 |
+0.40 |
+0.41% |
Cboe Volatility Index® |
15.82 |
-0.17 |
-1.06% |
WTI Crude Oil |
$69.50 |
+$0.29 |
+0.42% |
Bitcoin |
$118,845 |
+$190 |
+0.16% |
(Wednesday market open) There's little drama about the Federal Reserve's rate decision today with virtually no chance of a move. But information from the meeting and what happens right after it could enlighten investors. For the first time in a while, there may be a dissent or two, as some Fed policy makers recently called for a July cut. And Chairman Jerome Powell might indicate at his press conference that a September cut is possible if data allow. Stocks steadied early Wednesday as investors studied fresh jobs and economic growth data.
Microsoft (MSFT) and Meta Platforms (META) both report later, providing insight on chip spending, advertising trends, cloud performance, and AI. The so-called Magnificent Seven achieved their first collective new high since December on Monday but stocks fell Tuesday for the first time in over a week as trade talks with China yielded no fresh fruit. Questions center around President Trump's August 12 tariff deadline for China and whether that gets extended. Treasury yields inched up today after retreating to three-week lows yesterday as June job openings slipped.
"The pace of hiring slowed along with job openings, indicating weakness in labor demand," said Kathy Jones, Schwab's chief fixed income strategist. "However, layoffs and firings remain low as well, leaving the labor market stagnant. It’s not falling apart or deteriorating rapidly but it seems to have lost its dynamism."
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Three things to watch
- GDP, ADP jobs data exceed expectations ahead of PCE tomorrow: The government's first estimate for second quarter gross domestic product (GDP) growth was 3% on an annualized basis, compared with consensus of 2.5% and up from –0.5% in the first quarter. Keep in mind, however, that falling imports played a large role in the turn-around. Heavy imports in the first quarter contributed to the decline then as companies prepared for tariffs. Import demand dropped in the second quarter, igniting GDP. The GDP deflator, which measures prices across the economy, rose 2%, down from 3.8% in the first quarter. Investors brace for more data tomorrow with the Personal Consumption Expenditures (PCE) price index for June, which is expected to reinforce ideas that prices are rising, possibly due to tariffs. Separately, the ADP employment report this morning looked robust as private sector jobs growth climbed 104,000 in July after a revised 23,000 decline in June. "Note that the month-to-month correlation is low," with the government's nonfarm payrolls report due Friday, Jones said. "However, it may make traders more cautious about Friday's payroll figures."
- Jobs growth data casts large shadow on Fed policy: If there's one number that could define the week, it's Friday's July jobs growth figure. Analysts are conservative at 102,000, down from 147,000 in June. However, jobless claims have declined six straight weeks. This doesn't necessarily indicate heavy hiring but could suggest a slowdown in layoffs. Thursday's monthly Challenger job cuts report could offer details on how quickly companies are letting go of workers. If job losses mount, it might help convince the Fed that it could cut rates without triggering an inflation surge. At this point, odds of at least one rate cut by September are 64%, according to the CME FedWatch Tool. If the majority of policy makers leans toward a September cut, Jones added, it's possible that expectation will be included in the Fed's statement today. "However, we don't put high odds on this since the Fed doesn't have a high level of confidence about its forecasts due to policy uncertainty" caused by tariffs, she said. Other things to watch in the statement include the Fed's assessment of national business conditions and the outlook for inflation. And at the press conference, check if Powell has new thoughts on the potential tariff impact now that recent trade agreements have made tariff levels clearer.
- Tracking volatility as market builds in more ahead: The Cboe Volatility Index (VIX) popped 6% Tuesday from near its 2025 lows, possibly hinting at anxiety heading into earnings and data. The VIX futures complex is in contango, meaning contracts later this year are priced well above the spot level, rising above 20 by late October (anything under 20 is considered low). This is traditionally a bearish set-up, and the jump in VIX yesterday corresponded with a drop in major stock indexes. "The price action has been tentative so far this week and it may be providing early indications that a counter-trend consolidation move is approaching," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. Signs of that include stocks selling off on good news, closing near the lows of the day rather than the highs, and "buying the dip" shifting toward selling into strength. If reflexive selling develops at prior all-time highs in the Dow Jones Industrial Average and the S&P 500 Equal Weight Index (SPXEW), it could suggest a near-term pullback afoot.
On the move
- Starbucks (SBUX) jumped 4% before the open after the coffee firm reported better-than-expected revenue in its latest quarter. Still, the company continues to struggle in some respects as same-store sales—at stores open a year or more—declined for the sixth quarter in a row.
- Humana (HUM) climbed 8% ahead of the open. Second quarter earnings surpassed analysts' expectations and the insurance firm raised its 2025 earnings and revenue outlook.
- Palo Alto Networks (PANW) fell 5% in early trading after CNBC reported it intends to buy cybersecurity firm CyberArk (CYBR) in a $25 billion deal.
- Visa (V) dropped nearly 2% in pre-market trading despite topping analysts' revenue and earnings estimates for the quarter. The company said consumer spending "remains resilient" and kept full-year guidance unchanged.
- Super Micro Computer (SMCI) climbed another 2% this morning and has been rallying ahead of its earnings report next Tuesday.
- Mondelez International (MDLZ) fell 1% in early action despite beating Wall Street's quarterly earnings estimates. The maker of Oreo cookies still sees full year adjusted earnings falling 10%.
- Adidas, which doesn't trade on major U.S. exchanges, fell 7% in overseas trading as the company said that costs associated with U.S. tariffs hurt its business and may force it to raise prices. Competitor Nike (NKE) fell 0.7%.
- Novo Nordisk (NVO) dropped another 4% early today after falling more than 20% as it cut revenue guidance. Shares of competitor Eli Lilly (LLY) fell 5% Tuesday in sympathy amid worries about obesity drug demand. Lilly rebounded in early action today.
- Whirlpool (WHR) dipped in pre-market trading. Shares dropped 13% Tuesday after earnings missed Wall Street's expectations.
- United Parcel Service (UPS) inched up ahead of the open. Shares fell 10% yesterday following disappointing quarterly results.
- UnitedHealth Group (UNH) rebounded nearly 1%. The stock slipped 7% Tuesday after earnings and guidance missed consensus. The company is struggling with rising care costs.
More insights from Schwab

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Chart of the day

Data source: Nasdaq. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Back on April 22, the Nasdaq-100® (NDX—candlesticks) closed below its 20-day moving average (blue line). That was the last time it would do so in a streak that continued yesterday. However, this long a streak is unusual historically and could suggest the market is overbought. So could the tech-heavy Nasdaq-100's relative strength index (RSI). It fell to 71 yesterday but anything above 70 represents historically overbought conditions.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.
July 31: June personal income, June personal spending, June PCE prices, and expected earnings from CVS Health (CVS), Biogen (BIIB), Apple (AAPL), Amazon (AMZN), Strategy (MSTR), Coinbase Global (COIN), Clorox (CLX), Roku (ROKU), and Lumen Technologies (LUMN).
August 1: July nonfarm payrolls, final July University of Michigan Consumer Sentiment, July ISM Manufacturing PMI®, and expected earnings from Exxon Mobil (XOM) and Chevron (CVX).
August 4: June factory orders and expected earnings from Tyson Foods (TSN), Hims & Hers Health (HIMS), Wayfair (W), and Palantir (PLTR).
August 5: July ISM Services PMI® and expected earnings from Pfizer (PFE), Caterpillar (CAT), BP (BP), Marriott (MAR), Duke Energy (DUK), DuPont (DD), Cummins (CMI), Yum! Brands (YUM), Advanced Micro Devices (AMD), Super Micro Computer (SMCI), Amgen (AMGN), Arista Networks (ANET), Opendoor Technologies (OPEN), Snap (SNAP), and Rivian Automotive (RIVN).
August 6: Expected earnings from Disney (DIS), Uber (UBER), Shopify (SHOP), AppLovin (APP), DoorDash (DASH), McKesson (MCK), Airbnb (ABNB), and Lyft (LYFT).