June PCE Prices Land as Expected as Tech Impresses
Published as of: July 31, 2025, 9:17 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® index |
6,362.90 |
-7.96 |
-0.12% |
| Dow Jones Industrial Average® |
44,461.28 |
-171.71 |
-0.38% |
| Nasdaq Composite® |
21,129.67 |
+31.38 |
+0.15% |
| 10-year Treasury yield |
4.35% |
-0.02 |
-- |
| U.S. Dollar Index |
99.91 |
+0.10 |
+0.11% |
| Cboe Volatility Index® |
15.03 |
-0.45 |
-2.91% |
| WTI Crude Oil |
$69.63 |
-$0.37 |
-0.51% |
| Bitcoin |
$119,280 |
+$1,660 |
+1.39% |
(Thursday market open) Just as Wall Street lost some of its mojo thanks to a hawkish Federal Reserve, Microsoft (MSFT) and Meta Platforms (META) came to the rescue with impressive quarters, sending their shares up 8% and almost 12% ahead of the open. Major indexes took their cue from those two mega caps. But Wall Street can't rest on its laurels as investors eye Personal Consumption Expenditures (PCE) and await Apple (AAPL) and Amazon (AMZN) before tomorrow's nonfarm payrolls report.
The Fed kept rates unchanged yesterday where they've been since last December. This disappointed bulls who'd hoped Chairman Jerome Powell might hint at a September rate cut. Instead, Powell sounded in no hurry, noting that inflation remains above the Fed's 2% goal and has been affected by tariffs. Chances of a September rate cut fell to just over 40% this morning, according to the CME FedWatch Tool, down from 65% earlier this week, and the U.S. dollar gained on ideas that rates could stay higher for longer.
Most major indexes fell for the second straight session Wednesday amid disappointment over the hawkish Fed tone, the first back-to-back decline for the S&P 500 index in more than three weeks. Only a handful of sectors, including the defensive utilities along with tech, managed gains. This morning saw June PCE—the Fed's favored inflation indicator—come in as expected at 0.3% for both headline and core, with core excluding volatile food and energy. Both were up from 0.1% and 0.2% in May. "Looking at today's numbers, the Fed can say there isn't yet enough evidence to warrant a rate cut," said Kathy Jones, chief fixed income strategist at Schwab. "Inflation is above target and turning higher. Tariffs will increase prices while the job market seems steady."
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Three things to watch
- PCE data deeper dive: Today's inflation data showed the prices of goods rising 0.4% from 0.1% in May while services prices rose 0.2%, the same as in May. This squares with what Powell said in his press conference Wednesday about a shift from services to goods inflation, possibly linked to the tariff impact. Checking the annual numbers, core PCE was steady at 2.8%, but May got revised up to 2.8% from 2.7%. Separately, personal spending in June looked a bit healthier with a 0.3% rise following a flat read the prior month. Still, analysts had expected 0.4%. In other data today, U.S. job cuts rose 140% in July from a year ago after falling 1.6% in June, according to the latest data from Challenger, Gray & Christmas. The tech sector led with the most cuts at more than 13,000. Today's weekly initial jobless claims data were on the low end of the recent trend at 218,000.
- Wide ranges seen for tomorrow's jobs number: Friday's nonfarm payrolls report is expected to show jobs growth of 102,000, down from 147,000 in June. The June report got a lift from public sector hiring in education, a surge not likely repeated in July. Estimates for Friday range from zero to 170,000. This could reflect analysts and companies having trouble reading the economic roadmap amid so much geopolitical and tariff uncertainty. There's also a sense that unemployment, which was 4.1% in June, could tick back up to 4.2%. However, declining labor force participation in recent months is one factor keeping unemployment low. Recent jobs reports have tended to surprise toward the upside, including in June. But that month included a large gain in the education category that isn't likely to repeat in July.
- Earnings prep as Amazon and Apple prepare to report: Amazon is a major player in the cloud space and could offer an update on demand for that key economic component as well as consumer demand shaping its retail business. Cloud growth was prodigious last quarter for Microsoft and Alphabet (GOOGL), putting market leader Amazon in a place where it needs to defend its share. Results from Amazon's retail segment could help shape investor expectations for big box store earnings due next month after improved U.S. consumer sentiment and retail sales suggested a shopping revival. Apple's earnings put the focus on how tariffs have affected the company, with recent lack of progress on U.S. trade deals with India and China possible challenges. And iPhone demand, always a focus, has seen some weakness, analysts said.
On the move
- Microsoft rose 8% ahead of the open. Its closely watched cloud revenue popped 27% to exceed Wall Street's expectations. Drilling down, Azure and other cloud services climbed 39%, while other business segments also saw revenue beat the company's prior guidance.
- Meta Platforms gained nearly 12% in pre-market trading. Meta forecast better-than-expected third quarter revenues and kept its capital spending forecast roughly the same as last quarter. This may disappoint chip market investors after Alphabet raised cap-ex last week, but Meta expects another rise in cap-ex next year. Meta's revenue got support from a 9% average price per ad increase from a year earlier. The company said its AI efforts are improving its ad business.
- Nvidia (NVDA) and Advanced Micro Devices both rose 2.5% in early trading, lifted by strength in Meta and Microsoft as those businesses appear to be thriving. This could lead to heavier AI chip demand.
- CVS Health (CVS) jumped nearly 8% in pre-market trading after a solid earnings report that beat expectations. It also offered a better-than-expected outlook.
- Qualcomm (QCOM) slid 5% ahead of the open despite beating consensus on quarterly earnings and offering an in-line forecast for the current quarter. Handset and auto sector revenue missed estimates, Barron's noted.
- Ford (F) slipped in early trading despite second quarter revenue topping analysts' estimates. The automaker reinstated its guidance and expects a $3 billion tariff hit, though it can offset $1 billion of that, CNBC reported.
- Arm Holdings (ARM) plunged 7% ahead of the open despite an earnings report that basically matched expectations. The company's outlook was also in line with Wall Street's thinking.
- Lam Research (LRCX) fell 8% in pre-market trading even though the semiconductor equipment maker's earnings and revenue beat analysts' estimates and its forecast also topped consensus.
- Comcast (CMCSA) rose 6% on an earnings beat.
- Norwegian Cruise Line (NCLH) jumped 13% after the firm reported record second quarter revenue but missed analysts' expectations on earnings per share.
- Crude oil (/CL) dropped in early trading after climbing yesterday to close above $70 per barrel for the first time in a month and back above its 200-day moving average. Rising tensions between the U.S. and Russia sent prices up this week.
- Treasury yields fell this morning after China's official manufacturing PMI fell into contractionary territory at 49.3. Anything below 50 represents contraction. The U.S. trade deal with South Korea that puts 15% tariffs on imports from that Asian country also helped ease yields. Yields rose from their lows after the PCE data reaffirmed sticky U.S. inflation.
- Bitcoin (/BTC) rebounded 1.3% and stocks related to crypto, including Strategy (MSTR) and Coinbase (COIN), also moved higher in the early going. Crypto fell late yesterday as a hawkish Fed meeting raised concerns that the market's risk-on sentiment might take a blow.
More insights from Schwab
September rate cut eyed: While the Fed didn't cut rates in July, it did appear to open the door for a cut later this year. "We continue to believe that there will be enough evidence to support a decision to ease policy by the September meeting," Jones wrote in her Fed meeting analysis. "By then, we expect to see further moderation in economic growth and enough weakness in the labor market to warrant a rate cut."
" id="body_disclosure--media_disclosure--150091" >September rate cut eyed: While the Fed didn't cut rates in July, it did appear to open the door for a cut later this year. "We continue to believe that there will be enough evidence to support a decision to ease policy by the September meeting," Jones wrote in her Fed meeting analysis. "By then, we expect to see further moderation in economic growth and enough weakness in the labor market to warrant a rate cut."
Chart of the day
Data source: CME Group. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Copper futures (/HG—candlesticks) took a 19% plunge yesterday to their lowest levels in nearly four months and below their 200-day moving average (blue line) for the first time since early April. The trigger for the plunge in what some traders colloquially call "Dr. Copper," an industrial metal that can serve as a bellwether for economic demand, was President Trump's announcement that tariffs on copper would be slightly less onerous than initially thought. His policy outlines exemptions for certain refined copper products and raw materials. Tariffs will be 50% on imports of some forms of the metal.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.
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).
August 7: Preliminary Q2 productivity and expected earnings from Eli Lilly (LLY), ConocoPhillips (COP), Constellation Energy (CEG), Becton Dickinson (BDX), Kenvue (KVUE), Warner Bros Discovery (WBD), Gilead Sciences (GILD), Block (XYZ), Expedia (EXPE), Wynn Resorts (WYNN), and Under Armour (UAA).