New York Stocks Mixed in Early Trading as Investors Await Fed Rate Decision on the 30th

83% of S&P 500 Companies Beat Earnings Expectations
FOMC Meeting on the 30th: Rate Freeze Highly Likely
Differences in Rate Path Views Among Committee Members, Powell's Remarks in Focus
Second-Quarter GDP, Inflation, and Employment Data to Be Released This Week
Tariff Suspension Extension Expected at Third Round of US-China Trade Talks

The three major indices of the New York Stock Exchange showed mixed movements in early trading on the 29th (local time). As the United States reached a trade agreement with the European Union (EU) following Japan, investors are digesting corporate earnings reports while maintaining a wait-and-see stance ahead of the key interest rate decision scheduled for the following day.

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As of 9:50 a.m. on the New York Stock Exchange, the Dow Jones Industrial Average, which is centered on blue-chip stocks, was down 63.2 points (0.14%) from the previous trading day at 44,774.36. The S&P 500 Index, focused on large-cap stocks, was up 3.14 points (0.05%) at 6,392.91, while the Nasdaq Index, which is centered on technology stocks, was up 34.19 points (0.16%) at 21,212.77.

By stock, Nvidia was up 1.43%. Microsoft (MS) was up 0.62%, while Apple was down 0.7%. Boeing, the U.S. aircraft manufacturer, despite reporting strong earnings after delivering the most aircraft since 2018, was down 2.16%. Whirlpool and UPS, which reported results below market expectations, were down 12.42% and 8.27%, respectively.

The corporate earnings released so far have generally shown strong performance. According to market research firm FactSet, 170 companies in the S&P 500 have announced their earnings so far, and more than 83% of them have exceeded market expectations.

This week, major big tech companies such as Microsoft, Meta (the parent company of Facebook), Apple, and Amazon are scheduled to release their earnings. The key focus is whether investments in artificial intelligence (AI) are translating into actual profits.

The market is closely monitoring the Federal Reserve's key interest rate decision scheduled for the 30th. The Fed is holding a two-day Federal Open Market Committee (FOMC) regular meeting starting today to decide the benchmark interest rate, which currently stands at 4.25-4.5% per year. While a rate freeze is widely expected, investors are paying close attention to the direction of discussions among Fed officials regarding the future interest rate path and the tone of remarks by Fed Chair Jerome Powell.

Major U.S. economic indicators are also being released in succession. On the 30th, the U.S. Department of Commerce will announce the advance estimate for second-quarter gross domestic product (GDP). On the 31st, the June Personal Consumption Expenditures (PCE) Price Index will be released, and on August 1, the July employment report from the U.S. Department of Labor will be published.

Ulrike Hoffmann-Burchardi, Chief Investment Officer (CIO) and Global Head of Equities at UBS Global Wealth Management, analyzed, "With the release of major U.S. economic indicators, the outcome of the Fed policy meeting, and the second-quarter earnings announcements of the Magnificent 7 ahead, investor sentiment in the market may be put to the test in the coming days."

Attention is also focused on whether the United States will reach additional trade agreements. The third round of high-level trade talks between the United States and China is underway for the second day in Stockholm, Sweden. The core issue of these negotiations is whether to extend the tariff suspension measure, which is set to expire on August 11, and it is reported that both countries are aiming for a three-month extension. In the first Geneva meeting, the two countries agreed to mutually reduce their ultra-high tariffs by 115 percentage points each, resulting in a 30% tariff rate for the United States and a 10% rate for China to be applied for 90 days.

Government bond yields are on the decline. The yield on the 10-year U.S. Treasury note, the global benchmark for bond yields, was down 6 basis points (1bp = 0.01 percentage point) from the previous trading day at 4.37%, while the yield on the 2-year U.S. Treasury note, which is sensitive to monetary policy, was down 2 basis points to 3.89%.