In just over two hours last night, investors got a clear snapshot of the U.S. economy and markets heading into the second half of 2025. It began with the Federal Reserve holding interest rates steady, followed by earnings from Microsoft and Meta.

Starting with the Fed: the U.S. central bank has kept rates elevated for months to contain inflation and maintain flexibility in case the economy struggles with Trump administration policies. President Trump, on the other hand, wants lower rates to stimulate growth, reduce the dollar’s strength, ease federal financing, and support his broader economic agenda. In typical Trump fashion, he blasted the Fed as “morons” running a “sadomasochistic” policy, and again targeted Chair Jerome Powell—especially after Powell’s comments last night.

Markets expected rates to remain in the 4.25%–4.50% range—and they did. But investors were also looking for Powell to signal a likely cut in September. That didn’t happen. Powell struck a more cautious tone than expected. In central bank jargon, that’s “hawkish,” the opposite of “dovish.” So hawkish, in fact, that odds of a September cut dropped below 50% for the first time in weeks.

Economists note the Fed’s message shifted from “we’re waiting for positive data to cut” to “we need convincing evidence before we cut.” It’s a subtle but meaningful change. Two FOMC members, Michelle Bowman and Christopher Waller, pushed for a cut at this meeting, which was anticipated given their prior comments. Bank of America summed it up: the theme of the night was “effective.” Powell stressed that as long as the economy holds up, keeping rates steady is more effective than cutting too soon and risking an emergency hike later. In short, the Fed remains firmly in risk-control mode.

Hawkish signals usually dampen equity sentiment—but not last night. Why? Microsoft and Meta delivered blowout earnings that overshadowed rate worries. After-hours trading showed Microsoft up 8% and Meta soaring 11.5%. These two giants—worth more together than the entire French stock market—lit a fire under global markets. Futures turned sharply higher, and European and Asian indexes followed suit. The driver? Explosive growth in AI adoption, where Microsoft and Meta dominate thanks to their vast ecosystems.

Elsewhere, the U.S. signed a 15% tariff deal with South Korea, matching the EU agreement. But tensions with India are rising as Washington moves forward with a 25% surcharge and sanctions over Russian oil imports. A compromise may come this week, but the tone is hardening. Relations with Brazil are also strained; Washington hit the country with a 40% tariff hike to force compliance. Meanwhile, China’s latest PMI data signaled industrial contraction and near-flat services activity, while Japan’s central bank held rates steady and raised inflation forecasts.

The earnings calendar is also in overdrive—July 30 ranks among the busiest days of the year for corporate reports, setting up more market-moving news.

In Asia, Japan’s Nikkei 225 snapped a four-day losing streak, gaining 1%. South Korea and India, under tariff pressure, slipped 0.5%. Hong Kong’s Hang Seng fell 0.6%, and Australia edged down 0.1%. European futures opened higher but trimmed some overnight gains.

Today's economic highlights:

On the agenda today: Chinese PMIs, estimated inflation figures for France and Germany for July and, in the US, Challenger layoffs, the core PCE price index, new jobless claims, personal income, household consumption and the Chicago PMI. See the full agenda here.

  • USD/GBP: 0.7569 GBP
  • Bund/OAT spread: 65 points (-0.5%)
  • VIX: 15.48 (-0.5%)
  • Gold: $3,306
  • Brent: $71.78
  • 10-year US: 4.354%
  • Bitcoin: $118,117

In corporate news:

  • Abbvie – Reportedly in talks to acquire Gilgamesh Pharmaceuticals for about $1 billion to strengthen its mental health drug pipeline.
  • Air Products – Issued weaker-than-expected Q4 profit guidance and cut its full-year outlook due to weak helium demand and the impact of selling its LNG business.
  • Alphabet – Google will invest $6 billion to develop a 1-gigawatt data center and power infrastructure in Andhra Pradesh, India.
  • Albemarle – Reported a surprise Q2 profit driven by strong lithium demand; shares rose over 6% premarket.
  • Amazon – Scheduled to report Q2 results after Thursday’s market close.
  • Apple – Scheduled to report Q3 results after Thursday’s market close.
  • Applied Digital – Beat Wall Street revenue estimates, driven by strong AI-related demand for its cloud infrastructure; shares jumped 25.6% premarket.
  • Arm Holdings – Shares fell 8% premarket after weak quarterly guidance and plans to invest in in-house chip manufacturing failed to impress investors.
  • Biogen – Raised its full-year profit forecast on strong demand for rare-disease drugs like Skyclarys, offsetting declining sales of older MS treatments.
  • Casey’s General Stores – Third Point hedge fund disclosed a new position in the convenience store operator.
  • Cigna – Beat Q2 profit estimates thanks to strong performance in its pharmacy benefit management unit.
  • Comcast – Topped revenue and profit estimates on strong theme park attendance, wireless growth in the U.S., and higher streaming revenues.
  • Cvr Energy – Backed by Carl Icahn, named Mark Pytosh as CEO and Brett Icahn to its board.
  • CVS Health – Beat Q2 profit estimates, citing strict cost controls in its Aetna health insurance unit.
  • Dexcom – Beat Q2 results on strong demand for glucose monitors; named Jake Leach as CEO.
  • Ebay – Forecast Q3 revenue above expectations after strong Q2 results driven by collectibles and renewed interest in Pokémon cards; shares surged over 10% premarket.
  • Eli Lilly – Announced that its diabetes drug Mounjaro outperformed Trulicity in reducing heart attack and stroke risk in a large study.
  • Equinix – Raised full-year earnings forecast, citing robust demand from businesses investing in AI-driven solutions.
  • Extra Space Storage – Reported Q2 core FFO below estimates due to lower net operating income from same-store properties.
  • Figma – To debut on Thursday after raising $1.22 billion in a highly successful IPO, signaling a rebound in U.S. tech listings.
  • Ford Motor – Warned U.S. tariffs on imported vehicles and materials like steel and aluminum will weigh more heavily on full-year results; shares fell 3% premarket.
  • HF Sinclair – Beat Q2 profit estimates as higher refining margins offset lower processing volumes; shares rose 1.3% premarket.
  • KKR – Reported a 9% rise in Q2 adjusted net income, driven by higher fee-related revenues.
  • Lam Research – Posted stronger-than-expected Q1 revenue on robust demand for chip-making equipment used in AI processors; shares gained over 4% premarket.
  • Meta Platforms – Issued Q3 revenue guidance well above Wall Street expectations and raised the lower end of its capex plans; shares soared 12.2% premarket.
  • Mgm Resorts International – Reported higher Q2 revenue, driven by strong online sports betting and its China division.
  • Microsoft – Delivered Q2 revenue above expectations, fueled by strong growth in its cloud platform Azure and AI investments; shares surged 8.6% premarket, nearing a $4 trillion valuation.
  • Nvidia – China’s internet regulator raised security concerns about Nvidia’s H20 AI chip, fueling uncertainty over its sales prospects in the region.
  • Prudential Financial – Reported higher Q2 profit on stronger investment management fees and robust international operations.
  • Public Storage – Raised the lower end of its 2025 core FFO outlook on faster acquisitions and stable operations.
  • Qualcomm – Forecast Q3 revenue above estimates, citing AI integration in consumer devices, but shares dropped over 6% premarket on concerns about reliance on premium smartphone chips and the looming loss of Apple as a modem customer.
  • Robinhood Markets – Beat Q2 profit estimates on a surge in trading activity across options, crypto, and equities; shares rose 2.7% premarket.
  • Rocket Companies – Disclosed as a new position by Third Point hedge fund.
  • Tesla – CEO Elon Musk announced a ride-sharing service launch in San Francisco, following Austin, without clarifying whether it will use autonomous vehicles.
  • Union Pacific and Norfolk Southern – Formally filed an $85 billion merger plan with the Surface Transportation Board for regulatory review.
  • Western Digital – Beat Q4 revenue estimates on strong enterprise demand for data storage products; shares climbed over 4% premarket.

Analyst Recommendations:

  • Annaly Capital Management: Argus Research Company maintains its buy rating and raises the price target from $21 to $22.
  • Aon: BMO Capital Markets maintains its market perform rating and raises the price target from $366 to $375.
  • Brixmor Property Group: Goldman Sachs maintains its buy rating and raises the price target from $29 to $31.
  • Brown & Brown: Argus Research Company downgrades to hold from buy.
  • C.H. Robinson Worldwide: Baird upgrades to outperform from neutral with a price target raised from $105 to $135.
  • Carlisle Companies: Zelman & Associates maintains a neutral rating and lowers the price target from $427 to $398.
  • Confluent: Barclays maintains its overweight rating and lowers the price target from $31 to $24. TD Cowen downgrades to hold from buy and lowers the price target from $32 to $24.
  • Dexcom: Nephron Research maintains its buy rating and raises the price target from $115 to $120.
  • eBay: JP Morgan maintains its neutral rating and raises the price target from $68 to $84.
  • Electronic Arts: Argus Research Company maintains its buy rating and raises the price target from $170 to $180.
  • Equinix: TD Cowen maintains its buy rating and raises the price target from $974 to $993.
  • Fair Isaac Corporation: Deutsche Bank maintains its buy rating and lowers the price target from $2,440 to $2,148.
  • Gaming and Leisure Properties: Goldman Sachs maintains its neutral rating and lowers the price target from $49 to $48.
  • Grab Holdings: Daiwa Securities maintains its outperform rating and raises the price target from $5.70 to $6.
  • Incyte Corporation: Barclays upgrades to overweight from under coverage, with a price target of $90.
  • Lam Research: B Riley Securities maintains its buy rating and raises the price target from $125 to $130.
  • Meta Platforms: Monness Crespi Hardt & Co maintains its buy rating and raises the price target from $780 to $860.
  • Old Dominion Freight Line: Vertical Research Partners upgrades to buy from hold with a price target of $170.
  • Robinhood Markets: Mizuho Securities maintains its outperform rating and raises the price target from $99 to $120.
  • Visa: Autonomous Research maintains its outperform rating and raises the price target from $375 to $393.
  • Western Digital Corporation: Barclays maintains its overweight rating and raises the price target from $50 to $80.