FX.co ★ US Equities Struggle for Direction

In afternoon trading, the upward momentum in US stocks diminished as market sentiments were tempered by political pressures concerning pharmaceutical pricing and weak consumer spending data, despite robust corporate earnings. Initially, the S&P 500 and Nasdaq reached new highs but eventually steadied near the unchanged mark, whereas the Dow Jones Industrial Average declined by over 100 points. The continuation of a 25% tariff on Mexican imports announced by President Trump, coupled with impending deadlines for broader trade measures, intensified investor anxiety. Additionally, the Federal Reserve’s favored inflation indicator, the core Personal Consumption Expenditures (PCE) price index, increased by 0.3% in June and 2.8% year over year, which heightened doubts about a potential interest rate cut in September. In corporate news, Meta’s shares jumped as much as 12% after surpassing earnings expectations and providing an optimistic sales forecast. Meanwhile, Microsoft saw a temporary 8% rise, pushing its market valuation beyond $4 trillion, largely due to the strong performance of its Azure cloud division. Investors are now turning their attention to the upcoming earnings reports from Apple and Amazon, as well as Friday’s jobs report, for more clues about the economic outlook.