Broad losses ahead of key Fed decision
Wall Street closed lower on Tuesday, with investors growing cautious as trade negotiations with China stalled and attention shifted to the US Federal Reserve’s upcoming interest rate decision. The S&P 500 fell 0.30% to finish at 6,370.86, while the Nasdaq dipped 0.38% to 21,098.29. Both indices had touched fresh intraday records earlier in the session. The Dow Jones Industrial Average lost 204.57 points, or 0.46%, closing at 44,632.99 after late-session selling intensified.
Market optimism from recent months, fuelled by trade progress with Japan and the EU, faced headwinds as talks with Beijing abruptly ended without a resolution. A pause on further China tariffs remains uncertain, with any extension requiring President Trump’s sign-off.
Earnings season mixed as bellwethers disappoint
Corporate earnings painted a mixed picture. Boeing shares fell more than 4% despite reporting strong aircraft deliveries, the best since 2018. Procter & Gamble edged slightly lower despite raising its full-year revenue forecast and announcing an internal leadership transition.
Other household names posted weaker results. UPS slumped over 10% after missing earnings expectations and withholding forward guidance. Whirlpool fell 13% after underwhelming second-quarter results and a dividend cut.
The earnings spotlight now shifts to tech heavyweights Meta, Microsoft, Apple, and Amazon, all set to report on Wednesday and Thursday. So far, 199 S&P 500 companies have reported, with nearly 82% surpassing earnings expectations, according to FactSet.
Fed pause expected, but market eyes September
Investors are now squarely focused on the Federal Reserve’s policy announcement due early Thursday AEST. The Fed is widely expected to hold rates steady at 4.25%–4.5%, but traders are looking for any signal that a rate cut could be on the table for September.
Australian market set for soft open amid CPI focus
The SPI 200 futures point to a modest 7-point drop at the open, with the local market awaiting monthly CPI figures at 11.30am AEST. According to TD Securities, inflation is expected to remain soft, with headline CPI forecast at 2.1% year-on-year, below consensus estimates but in line with the RBA’s May projections.
Wednesday also marks the busiest reporting day yet for the ASX earnings season, with Rio Tinto set to release results after market close. Earlier updates are due from Atlas Arteria, Champion Iron, Pilbara Minerals, and Mineral Resources.
Commodities and currencies
In commodities, Brent crude jumped 3.53% to US$72.51 a barrel, while iron ore rose 2.1% to US$102.95 a tonne. Gold gained 0.08% to US$3,383.80 an ounce. The Australian dollar slipped slightly to US65.12¢.
The VIX volatility index rose to 15.98. Bitcoin dropped 0.6% to US$117,449.
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