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July 30, 2025 – 14:03

(Bloomberg) — Stocks struggled for direction in the hours before Wednesday’s Federal Reserve interest-rate decision as traders tackled a heavy load of major company earnings.

S&P 500 contracts were little changed in the lead-up to the decision on interest rates, which have become a cause of contention between the White House and Fed Chair Jerome Powell. The Bloomberg Dollar Spot Index snapped a four-day rally that followed trade pacts with the European Union and Japan.

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Fed policymakers are largely expected to hold rates steady for a fifth consecutive meeting in the face of sustained pressure from President Donald Trump on Powell to lower borrowing costs. Investors will watch for any signs of a greater openness from the Fed to easing when it next gathers in September as they take stock of the number of dissenting policymakers. Swap markets have priced around 100 basis points of easing over the next 12 months.

“They’ll want to see what happens on the inflation side, so the speed of those cuts may not be as much as risk assets might want,” Priya Misra, portfolio manager at J.P. Morgan Asset Management, told Bloomberg TV. “Interest rates are still restrictive. How much do they need to cut to get into accomodative territory? They have to cut a lot.”

Before the Fed, GDP figures will offer an update on the health of the American economy in the buildup to Friday’s key payrolls report. The relentless rush of big earnings continues in the US later, with Microsoft Corp. and Meta Platforms Inc. both reporting.

What Bloomberg’s Strategist Say…

“Earnings and data matter more than Wednesday’s Fed meeting, and that’s why stocks will likely nudge higher again this week, despite any possible short-term disruption from the central bank decision. This year is primarily about trade policy, and the most important issue for markets and consumers is, when will the impact of tariffs show up in prices and profits? It’s the answer to that question that will dictate the future US rate path more than any sell-side generated excitement over the number of dissents.”

—Mark Cudmore, macro strategist. Click here for the full analysis.

On the trade front, there were signs of rapprochement between the US and China. Trump is set to make the final call on maintaining their tariff truce before it expires in two weeks, an extension that would mark a continued stabilization in ties between the world’s two biggest economies. Chinese trade negotiator Li Chenggang told reporters in Stockholm the two sides had agreed to prolong the pause, without providing further details.

“It’s clear both sides want to do a deal,” said Justin Onuekwusi, chief investment officer at St James’s Place in London. “That willingness at the moment is enough to appease markets.”

Elsewhere, the US West Coast and countries in the Pacific braced for tsunamis in the wake of a powerful earthquake in Russia’s Far East, although the initial waves to hit Japan were small. The yen gained 0.4% against the dollar after a tsunami warning for areas including the Tokyo Bay.

Corporate News:

Starbucks Corp. gained in premarket trading as investors focused on positive signs in its turnaround plan despite a sales miss, including improved transactions in China and CEO Brian Niccol’s comment that recovery efforts are ahead of schedule. Mercedes-Benz Group AG and Porsche AG scaled back their profit expectations for the year, underscoring the toll President Donald Trump’s trade war is taking on some of Europe’s largest luxury-car makers. UBS Group posted higher-than-expected profit in the second quarter; HSBC Holdings Plc’s earnings for the second quarter fell short of expectations; HSBC also said Swiss and French authorities are probing its private bank. Santander posted a record second-quarter profit and announced a new buyback. BAE Systems Plc raised its earnings outlook for the full year as the UK defense contractor benefits from increased military spending in Europe, but shares fell after it did not upgrade some key financial targets. Adidas AG reported strong second-quarter profit as consumers kept snapping up retro sneaker models. Glencore Plc said it will take $1 billion of costs out of the business by the end of 2026, as the company responds to pressures from lower commodity prices and the economic impacts of President Donald Trump’s trade war. Hermès sales rose as wealthy shoppers continued to snap up its pricey handbags, showing the company’s resilience amid a sharp downturn in demand for high-end goods that has hit its luxury peers. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.1% as of 8 a.m. New York time Nasdaq 100 futures rose 0.2% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 was little changed The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1541 The British pound was little changed at $1.3364 The Japanese yen rose 0.2% to 148.19 per dollar Cryptocurrencies

Bitcoin rose 0.5% to $118,073.45 Ether rose 0.4% to $3,779.54 Bonds

The yield on 10-year Treasuries was little changed at 4.32% Germany’s 10-year yield declined two basis points to 2.68% Britain’s 10-year yield declined five basis points to 4.58% Commodities

West Texas Intermediate crude fell 0.9% to $68.62 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jacob Gu, Anand Krishnamoorthy and Sujata Rao.

©2025 Bloomberg L.P.