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Tech Earnings, M&A Prop Up US Stocks Near Record Highs Despite Fed Caution and Tariffs

Policy uncertainty deepens with delayed Fed rate cuts and looming tariffs.

Benchmark equity indices Sensex and Nifty tumbled in early trade on Thursday.
A man walks past a brokerage house with a display board showing the stock index information, in Beijing, China April 9, 2025. REUTERS/Tingshu Wang/File Photo
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top center left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Thursday, July 31, 2025. (AP Photo/Ahn Young-joon)
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 30, 2025. REUTERS/Jeenah Moon

Overview

  • US benchmarks closed near all-time highs after Microsoft and Meta posted strong earnings and major M&A deals by Union Pacific and Baker Hughes underpinned market gains.
  • The Federal Reserve maintained its policy rate at 4.25–4.50% as Chair Jay Powell warned that tariff-driven inflation risks have tempered expectations for rate cuts this year.
  • President Trump’s announcement of a 25% tariff on Indian imports effective August 1 spooked Asian markets and weighed on the rupee.
  • Asian equities fell following weaker-than-expected Chinese activity data and a sharp drop in copper prices linked to US trade measures.
  • Market participants are awaiting the Fed’s meeting minutes and the expiry of the US-China trade truce extension for clues on monetary policy and potential deal progress.