Dow Jones Drops 463 Points, Nasdaq Slips 0.2% as Iran Strikes and Fed Verdict Loom Over US Markets

Mumbai, July 29: US stock markets opened lower on Wednesday as investors braced for the Federal Reserve’s interest rate decision amid escalating geopolitical tensions in the Middle East. The Dow Jones Industrial Average fell 463.27 points, or 0.88%, to 52,284.05 in early trading, while the S&P 500 declined 0.2% to 7,416.11.  

The tech-heavy Nasdaq Composite slipped 0.2% to 24,814.66, extending its losing streak to six consecutive sessions. The declines come as Iran launched a surprise ballistic missile attack on US forces in the Middle East, prompting President Donald Trump to warn that the US would be “hitting them hard” in response. Oil prices surged, with Brent crude jumping 6.6% to $89.61 per barrel and West Texas Intermediate climbing 6.4% to $84.31 per barrel. 

Iran Missile Attack Sends Oil Surging 6.6% as Trump Vows Retaliation 

Crude prices spiked sharply after US Central Command reported that Iran’s Islamic Revolutionary Guard Corps launched multiple ballistic missiles in an attempted surprise attack on US forces based in the Middle East. The missiles were successfully intercepted, Centcom said, but the attack ended a short-lived pause in hostilities that had raised hopes for peace talks.  

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President Trump told Fox News that the US would respond forcefully, saying: “We’ll be hitting them hard. They’re going to get a beating”. The escalation pushed Brent crude futures 6.6% higher to $89.61 per barrel, while US benchmark WTI futures advanced 6.4% to $84.31 per barrel.  

The jump in energy prices added to inflationary concerns ahead of the Fed’s policy announcement and weighed on consumer discretionary stocks, as higher fuel costs threaten to dampen household spending. 

Federal Reserve Decision Looms with 36% Rate Hike Probability 

The Federal Open Market Committee is expected to announce its interest rate decision at 2:00 PM ET, with markets sharply divided on the outcome. According to CME Group’s FedWatch tool, traders are pricing in a 64% probability that the central bank will hold rates steady at the current target range of 3.5% to 3.75%.  

However, a 36% chance remains that the Fed will deliver its first quarter-point rate hike in three years. The uncertainty stems from persistent inflationary pressures, with US gasoline prices moving back above $4 a gallon. The 10-year Treasury yield edged up over 1 basis point to 4.614%, touching its highest level since January 2025. Fed Chairman Kevin Warsh’s measures to clamp down on central bank communications have further complicated the outlook, leaving investors guessing about the committee’s true policy bias. The dollar index remained little changed at 101.46, while gold futures slipped 0.6% to $4,015 an ounce. 

Semiconductor Sell-Off Deepens as SK Hynix Earnings Disappoint 

Chip stocks continued their downward trajectory, with the iShares Semiconductor ETF falling 0.4% in early trading. The Philadelphia Semiconductor Index has now dropped approximately 25% from its record closing high on June 22, extending a four-session losing streak that has seen the sector shed nearly 7% week to date. SK Hynix’s US-listed shares fell 0.4% after the South Korean memory maker reported second-quarter profit growth of 557% year-over-year that nevertheless failed to meet Wall Street’s elevated expectations.  

The stock closed 9.6% lower in Seoul after falling as much as 15% during the session. The chip rout has exposed the brutal cost of leverage, with the Direxion Daily Semiconductor Bull 3X Shares plunging nearly two-thirds from its June peak, compared to a 25% decline in the underlying iShares Semiconductor ETF. The VanEck Semiconductor ETF lost 3.5% on Tuesday, extending its losing streak to four sessions, and is now down more than 9% over the past week. 

Microsoft and Meta Earnings Set to Test AI Trade Resilience 

Investors are awaiting quarterly results from two Magnificent Seven companies, Microsoft and Meta Platforms, scheduled for release after the closing bell. The reports come at a pivotal moment for the AI trade, following Alphabet’s capital expenditure guidance last week that spooked markets and resurfaced concerns about the sustainability of massive AI spending. Microsoft shares fell 1% in early trading, while Meta declined 0.58%, reflecting cautious positioning ahead of the results.  

The Magnificent Seven exchange-traded fund has declined over 8% since its June peak, and the Roundhill Memory ETF dropped 1.5% on Wednesday, adding to the pressure on semiconductor-related names. Analysts are closely watching whether Microsoft and Meta can justify their multibillion-dollar AI investments with tangible revenue growth, as any disappointment could trigger further selling in the technology sector. 

Dow Jones Industrial Average Drops 463 Points as Procter & Gamble Misses Revenue 

The blue-chip Dow Jones Industrial Average fell 463.27 points, or 0.88%, to 52,284.05 in early trading, weighed down by a 3.5% decline in Procter & Gamble shares. The consumer goods company reported adjusted earnings of $1.43 per share, beating estimates of $1.41, but revenue of $21.2 billion missed the expected $21.38 billion, reflecting underwhelming demand for its products. Among Dow components, Chevron rose 2.62% as oil prices surged, while Coca-Cola gained 2.52% and Amgen added 0.80%.  

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However, Goldman Sachs fell 2.35%, Caterpillar dropped 2.55%, and Boeing declined 2.36%, offsetting gains in energy and consumer staples. The Dow’s day range stretched from 52,273.90 to 52,674.21, with trading volume reaching 44.7 million shares in the opening hour. The index’s 52-week range stands at 43,340.68 to 53,289.30, with an average volume of 535.7 million shares. 

S&P 500 Slips 0.2% as Broad Market Weakness Offsets Energy Gains 

The benchmark S&P 500 declined 0.2% to 7,416.11, with eight of 11 sectors trading lower. Energy was the best-performing sector, rising 3.05% as oil prices surged, while consumer staples fell 2.81% and technology declined 1.02%. The S&P 500’s day range was 7,410.66 to 7,426.38, with a trading volume of 283.8 million shares in the opening session.  

Among S&P 500 components, GE HealthCare Technologies jumped 7% after reporting second-quarter revenue of $5.3 billion, up 5.7% year-over-year, with organic orders rising 11.1% and a record order backlog of $23.9 billion. Ford Motor surged 5% after beating earnings expectations and raising its 2026 forecast, with second-quarter revenue of $48.3 billion and adjusted earnings of 42 cents per share topping estimates. Generac Holdings advanced 3.5% after reporting adjusted earnings of $2.91 per share, well above estimates of $2.01, and announced a new global supply agreement with a second hyperscale customer.  

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However, Vertiv Holdings tumbled 10% on mixed results, with organic revenue growth of 17.8% falling short of the 23.6% consensus. Procter & Gamble fell 3.5% after its revenue miss, while CoStar Group sank 8.5% and Visa edged lower after issuing disappointing guidance. 

Nasdaq Composite Extends Losing Streak to Six Sessions 

The tech-heavy Nasdaq Composite fell 0.2% to 24,814.66, marking its sixth consecutive session of declines. The index has now dropped approximately 9.3% from its record set last month. The Nasdaq’s opening price was 24,863.48, with a day range of 24,790.35 to 24,899.98 and a trading volume of 796.3 million shares. Its 52-week range is 20,560.17 to 27,190.21, with an average volume of 9.64 billion shares.  

Among Nasdaq 100 components, Apple rose 0.77% after hitting $5 trillion in market capitalisation yesterday, while Cisco Systems gained 1.01% and Intel added 0.78%. However, semiconductor names weighed heavily, with Applied Materials falling 2.84%, AMD declining 1.02%, and Micron Technology dropping 0.88%. Seagate Technology surged 3.16% after beating revenue estimates in its first-quarter earnings, while ADP jumped 4.01%, Adobe gained 2.27%, and Mondelez International rose 4.62%. On the losing side, Arm Holdings fell 1.44%, Palo Alto Networks declined 1.31%, and NXP Semiconductors dropped 2.15%. 

Broader Market Indices Show Mixed Performance in Early Trading 

Beyond the major averages, broader indices exhibited divergent trends. The Russell 2000 index of small-cap stocks rose 0.20%, outperforming large-cap benchmarks as investors rotated into smaller companies amid rising oil prices. The S&P 100, which tracks the largest US companies, fell 0.25%, reflecting the drag from technology and consumer staples giants.  

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The Dow Jones Composite Average, which tracks 65 prominent companies across industrial, transportation, and utility sectors, declined 0.35%, while the Dow Jones Transportation Average slipped 0.5% and the Dow Jones Utility Average rose 0.8% as defensive plays gained favour. The Philadelphia Semiconductor Index, a key gauge of chip stocks, dropped 4.49% in early trading, extending its monthly decline to over 15%.  

The NYSE Composite Index fell 0.3%, while the S&P MidCap 400 and S&P SmallCap 600 gained 0.2% and 0.3% respectively, as mid- and small-cap names benefited from the rotation away from mega-cap tech. 

Tech Sector Faces Headwinds as Google Hit with EU Fine, Space Exploration Advances 

The technology sector faced additional headwinds as Google was found to have violated the EU’s Digital Markets Act, with competitors potentially seeking $10 billion in combined damages. This ruling could have far-reaching implications for major US technology companies operating in the European market. Meanwhile, the US Commerce Department awarded $300 million to GlobalFoundries for the development of advanced optical materials, wafer technology, and advanced packaging research, aiming to strengthen domestic semiconductor manufacturing capabilities.  

In the renewable energy space, NextEra Energy and Brookfield announced a $100 billion investment in data centre campuses, reflecting the continued expansion of AI-driven infrastructure investments. Shares of SpaceX fell 1.18% in early trading, while Chinese ADRs showed strength, with Li Auto rising 5.75%, NIO gaining 3.63%, XPeng adding 3.46%, and Bilibili climbing 2.88%. In the memory chip space, SanDisk rose over 2% and Micron Technology gained 1% despite the broader semiconductor weakness, as investors continued to monitor NAND and DRAM pricing trends. 

Key Corporate Earnings: Ford Surges, Generac Beats, Vertiv Tumbles 

A slew of quarterly results drove significant stock movements before the opening bell. Ford Motor shares rose 5% after the automaker reported second-quarter revenue of $48.3 billion and adjusted earnings of 42 cents per share, topping estimates. The company also raised its full-year adjusted EBIT and free cash flow outlooks, partly due to expected tariff refunds from the federal government.  

Generac Holdings surged 3.5% after reporting second-quarter adjusted earnings of $2.91 per share, well above estimates of $2.01, and announced a global supply agreement with a second hyperscale customer.  

However, Vertiv Holdings tumbled 10% as its organic revenue growth of 17.8% missed the consensus of 23.6%, raising concerns about AI infrastructure demand. Procter & Gamble fell 3.5% after its revenue miss, while Visa slipped 1% on disappointing guidance. GE HealthCare Technologies jumped 7% on record orders, and Biogen rose 0.7% after beating revenue estimates and raising its full-year adjusted EPS guidance. Bloom Energy surged 11.5% after raising its full-year profit and revenue forecast. 

Treasury Yields and Dollar Steady as Fed Decision Nears 

US Treasury yields edged higher ahead of the Federal Reserve’s policy announcement, reflecting cautious positioning. The yield on the 10-year US Treasury note rose over 1 basis point to 4.614%, while the 2-year Treasury yield increased over 1 basis point to 4.291%. The longer-dated 30-year Treasury bond yield was broadly flat at 5.1%. Markets are pricing in a 76% chance of a rate hike at the September meeting, according to CME Group’s FedWatch tool.  

The divergence in expectations reflects the complex inflation picture, with energy prices surging amid renewed Middle East tensions and core inflation remaining above the Fed’s target. The US dollar index was little changed at 101.46, while gold futures slipped 0.6% to $4,015 an ounce as investors favoured the dollar and Treasuries ahead of the policy announcement. 

Asian Markets Plunge as KOSPI Crashes 5.98%, SK Hynix Leads Sell-Off, Spilling Over into US Tech Stocks 

Asian markets suffered a brutal sell-off on Wednesday, with South Korea’s KOSPI Composite index tumbling 5.98% after SK Hynix’s disappointing earnings and mounting concerns over AI valuation. The index had already plunged more than 10% over the previous month to three-month lows.  

SK Hynix reported record second-quarter operating profit of 60.5 trillion Korean won, up 557% year-over-year, with revenue surging 257% to 79.3 trillion Korean won, yet the results failed to meet Wall Street’s supercharged expectations, triggering a 9.6% plunge in Seoul trading. Samsung Electronics fell over 6%, while Japan’s Nikkei 225 declined tracking regional weakness. The Asian chip rout directly impacted US markets at Wednesday’s opening, with the Nasdaq Composite falling 0.2% to 24,814.66, extending its losing streak to six sessions.  

The iShares Semiconductor ETF dropped 0.4%, while the Philadelphia Semiconductor Index declined 4.49%, adding to its 25% drop from the June 22 record high. US-listed semiconductor names came under pressure, with Nvidia falling 0.98%, AMD declining 1.02%, and Applied Materials dropping 2.84%, as AI valuation concerns resonated with US investors ahead of Microsoft and Meta earnings after the closing bell. 

 The convergence of geopolitical escalation, Federal Reserve policy uncertainty, and Big Tech earnings creates a high-volatility environment for US equities. Oil prices surged 6.6% following Iran’s missile attack, while Treasury yields edged higher ahead of the Fed decision. Semiconductor stocks remain under pressure, with the Philadelphia Semiconductor Index declining 4.49% in early trade. Corporate earnings showed mixed results, with Ford and Generac beating estimates while Procter & Gamble and Vertiv disappointed. The Fed’s policy announcement at 2:00 PM ET and subsequent press conference will provide critical guidance on the inflation outlook and future rate trajectory, with markets split on a potential hike. 

Source 

• https://www.nasdaq.com/ 

• spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.dowjones.com/