{"id":23066,"date":"2025-07-30T10:09:09","date_gmt":"2025-07-30T10:09:09","guid":{"rendered":"https:\/\/www.infinox.com\/global\/?p=23066"},"modified":"2025-07-30T10:14:14","modified_gmt":"2025-07-30T10:14:14","slug":"china-talks-break-down-and-fed-decision-looms-as-us-stocks-reverse","status":"publish","type":"post","link":"https:\/\/www.infinox.com\/global\/en\/china-talks-break-down-and-fed-decision-looms-as-us-stocks-reverse\/","title":{"rendered":"China Talks Break Down and Fed Decision Looms as US Stocks Reverse"},"content":{"rendered":"\n
US stocks reversed lower on Tuesday as renewed trade uncertainty ahead of the Federal Reserve\u2019s policy decision led to a broad pullback across major indices. Both the S&P 500 and Nasdaq gave up early gains after touching record highs, while the Dow extended losses into the close following confirmation that US-China negotiations had ended without agreement on extending tariff relief. The absence of clarity on trade policy, coupled with a mixed earnings picture and signs of softening in the labour market, added to investor unease. With several key data releases still to come this week and the Fed expected to hold rates steady, traders appeared reluctant to maintain risk exposure until clearer policy signals emerge from Wednesday\u2019s announcement and press conference.<\/p>\n\n\n\n
Key Takeaways:<\/strong><\/p>\n\n\n\n
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Dow Slides as China Talks Stall and Caution Builds Before Fed Decision:<\/strong> The Dow Jones Industrial Average dropped 204.57 points, or 0.46%, to 44,632.99 after US officials concluded talks with Chinese counterparts in Stockholm without confirming a tariff reprieve.\u00a0<\/li>\n\n\n\n
S&P 500 and Nasdaq Turn Lower After Hitting New Highs:<\/strong> The S&P 500 fell 0.30% to 6,370.86 and the Nasdaq Composite slipped 0.38% to 21,098.29 after both touched fresh intraday records earlier in the session. A wave of late-day profit-taking pulled both indices into the red as traders grew cautious ahead of the Fed\u2019s policy decision and a packed schedule of earnings.<\/li>\n\n\n\n
European Stocks Rise on Earnings Optimism as Spain Outpaces Eurozone Peers:<\/strong> The Euro Stoxx 50 rose 0.7% to 5,376, driven by a 10.7% rally in Philips after the group raised its 2025 profit margin guidance. Spain\u2019s IBEX 35 jumped 0.9% to its highest since January 2008 after Q2 GDP growth beat forecasts at 0.7% quarter-on-quarter and 2.8% year-on-year, widening the gap with slower-growing eurozone peers. The CAC 40 rose 0.72%, the DAX added 1.03%, and Milan\u2019s FTSE MIB climbed 1.23%, while the FTSE 100 advanced 0.60% to 9,136.32, its second-highest close of the year. Meanwhile, UK food inflation rose for the sixth consecutive month in July, reaching an annual rate of 4.0% from 3.7% in June, driven by price surges in staples like meat and tea. Mortgage approvals also came in stronger than expected, rising to 64,167 in June from 63,288 in May, suggesting a stabilising housing market after the spring stamp duty rollback.<\/li>\n\n\n\n
Asia-Pacific Markets Mixed as Japanese Exports Stall and Korea Hits Multi-Year High:<\/strong> Sentiment across Asian markets was mixed as investors balanced global trade risks with local growth signals. Japan\u2019s Nikkei 225 lost 0.79% to 40,674.55 after the government downgraded its export outlook for the first time in a year, calling external demand \u201clargely flat.\u201d The Topix also declined 0.75%. In contrast, South Korea\u2019s Kospi rose 0.66% to 3,230.57, its highest close in four years, lifted by optimism ahead of the August 1 tariff deadline. China\u2019s CSI 300 fell 0.39% and the Shanghai Composite slipped 0.3% as traders digested the potential inflationary consequences of the US-EU trade deal. Hong Kong\u2019s Hang Seng edged down 0.15% on profit-taking, while Australia\u2019s ASX 200 closed flat. Thailand added to regional caution after reporting a 6.2% drop in tourist arrivals this year, with China remaining the largest source but India overtaking it in US smartphone exports.<\/li>\n\n\n\n
US Data Mixed as Trade Boosts GDP Outlook While Labour Market Softens:<\/strong> The US goods trade deficit narrowed sharply in June to $86.0 billion, its smallest in nearly two years, as imports plunged 4.2% on weak demand for consumer goods and industrial supplies. Exports held firm, with strong gains in capital and food shipments. The data suggests trade could support Q2 GDP growth. However, the labour market showed further signs of slowing, with job openings dropping to 7.437 million and hiring falling by 261,000 in June. Consumer confidence rose to 97.2, but perceptions of job availability weakened to their lowest since early 2020.<\/li>\n\n\n\n
US Treasury Yields Fall as Traders Position Ahead of Fed Statement:<\/strong> The 10-year Treasury yield dropped 9.6 basis points to 4.324%, the 2-year fell 4.7 bps to 3.875%, and the 30-year yield declined nearly 11 bps to 4.859% as investors braced for the Fed\u2019s interest rate decision and Chair Powell\u2019s press conference. With markets fully pricing in no change to the current 4.25%-4.50% range, attention is focused on updated guidance and the Fed\u2019s inflation outlook.<\/li>\n\n\n\n
Oil Prices Surge Over 3% as US Threatens New Sanctions on Russia and China:<\/strong> Brent crude settled at $72.51 per barrel, up $2.47 or 3.53%, while WTI rose $2.50 or 3.75% to $69.21, both settling at their highest levels since June 20. President Trump warned of tariffs and other measures against Russia if it fails to show progress on ending the war in Ukraine within ten days. Separately, Treasury Secretary Bessent cautioned China over continued purchases of sanctioned Russian oil, raising the risk of secondary tariffs that could further tighten global supply.<\/li>\n<\/ul>\n\n\n\n
FX Today:<\/strong><\/p>\n\n\n\n\n<\/figure>\n<\/figure>\n\n\n\n
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EUR\/USD Falls as Two-Day Slide Erases July Gains:<\/strong> EUR\/USD closed at 1.1553, down 0.31% on the day after reaching a high of 1.1593 and a low of 1.1519. The pair recorded its second consecutive large red candle, breaking below the rising trendline that had supported the summer rally and confirming a sharp shift in short-term bias. While the broader uptrend remains intact above the 100-day SMA at 1.1347 and the 200-day at 1.0932, the loss of the 50-day SMA at 1.1569 and the failure to hold above 1.1600 highlight growing seller conviction. The breakdown also validates a rounded top formation that had been developing since late June, and leaves the door open for a deeper retracement toward structural support at 1.1500.\u00a0<\/li>\n\n\n\n
GBP\/USD Holds Flat as Price Stabilises Below 200-Day SMA:<\/strong> GBP\/USD closed unchanged at 1.3359, rising just 0.03% after recovering from a session low of 1.3308. The narrow green candle paused the sharp pullback from earlier in the week, but the pair remains structurally vulnerable after breaking below the 200-day SMA at 1.3333 on Monday. Short-term momentum has faded considerably, and price continues to trade beneath the 50-day SMA at 1.3531, confirming a shift in trend bias despite the longer-term bullish alignment of moving averages. Structurally, the pair is consolidating just above key support at 1.3300\u20131.3330, with a break below this zone exposing 1.3260 and possibly the May low near 1.3170.\u00a0<\/li>\n\n\n\n
USD\/CAD Climbs as Bulls Extend Break Above 50-Day SMA:<\/strong> USD\/CAD rose 0.26% to close at 1.3773 after reaching a high of 1.3788 and holding above Monday\u2019s low of 1.3728. The pair has now gained over 1% since last week\u2019s low, confirming a bullish reversal after weeks of range-bound drift. Price has established a clear breakout above the 50-day SMA at 1.3692 and is now approaching the 100-day SMA at 1.3872, which has not been tested since May. A sustained daily close above 1.3800 would confirm the trend shift and pave the way for a move toward the 200-day SMA at 1.4038. On the downside, immediate support sits at 1.3700, with stronger buying interest likely to re-emerge near the breakout level at 1.3630.<\/li>\n\n\n\n
EUR\/GBP Retreats to 0.8648 as Rejection From 0.8750 Triggers Pullback:<\/strong> EUR\/GBP declined 0.32% to 0.8648, falling from an intraday high of 0.8685 and marking its second consecutive red candle. The pair has now reversed much of last week\u2019s rally, breaking below the short-term pivot zone at 0.8680\u20130.8690 and slipping closer to support at 0.8620. Although the medium-term structure remains constructive with the 50-, 100-, and 200-day SMAs all rising, momentum indicators have rolled over, and the failure to hold gains above 0.8700 reflects fading buyer strength. Unless bulls can quickly reclaim that zone, the recent move looks increasingly like a failed breakout, with risk shifting toward a deeper retracement. Support at 0.8600 and then 0.8540\u20130.8550 will be key for holding the broader trend in place.<\/li>\n\n\n\n
Gold Holds Above $3,300 but Momentum Fades Below 50-Day SMA:<\/strong> Gold rose 0.31% to settle at $3,324 after reaching an intraday high of $3,334 and a low of $3,308. The metal printed a small-bodied green candle, signalling indecision as price continues to hover beneath the 50-day SMA at $3,336. Despite support holding above $3,300, recent sessions have formed a mild distribution pattern as the rally from the $3,246\u2013$3,250 zone loses energy. Structurally, gold is coiling within a tightening range between $3,375 and $3,300, with no decisive break either way. A close below $3,300 would expose the 100-day average at $3,246, while a sustained move above $3,340 is needed to regain bullish control and retest the upper boundary.<\/li>\n<\/ul>\n\n\n\n
Market Movers:<\/strong><\/p>\n\n\n\n
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Whirlpool Plunges After Cutting Dividend and Missing Q2 Estimates:<\/strong> Shares of Whirlpool sank more than 13% after the company reported second-quarter net sales of $3.77 billion.<\/li>\n\n\n\n
PayPal Drops on Slowing Checkout Volumes:<\/strong> PayPal Holdings fell over 8% after reporting second-quarter checkout volumes rose 5% quarter-on-quarter, down from 6% in Q1.\u00a0<\/li>\n\n\n\n
Amkor Technology Surges on Strong Q2 and Bullish Q3 Guidance:<\/strong> Amkor jumped more than 18% after reporting Q2 net sales of $1.51 billion, beating the $1.42 billion consensus.\u00a0<\/li>\n\n\n\n
Chart Industries Rallies on $13.6 Billion Buyout:<\/strong> Chart Industries gained over 16% after Baker Hughes announced a $13.6 billion acquisition offer for the company.<\/li>\n\n\n\n
Sarepta Therapeutics Spikes on Gene Therapy Approval:<\/strong> Shares of Sarepta Therapeutics soared more than 14% after US regulators approved expanded access to its gene therapy Elevidys for ambulatory patients, reversing earlier limitations on treatment availability.<\/li>\n\n\n\n
Cadence Design Systems Rises on Revenue Beat and Raised Outlook:<\/strong> Cadence Design Systems advanced 9% after second-quarter revenue came in at $1.28 billion, beating forecasts.\u00a0<\/li>\n<\/ul>\n\n\n\n
Tuesday\u2019s declines served as a reality check for markets that had grown used to steady gains in recent weeks. The sharp reversal in equities underscored how vulnerable sentiment remains to shifting trade dynamics. While earnings have broadly held up, concerns around softening demand, labour market fatigue, and tariff escalation are beginning to chip away at the narrative of resilience. With the Fed expected to stay on hold, the focus now shifts squarely to Powell\u2019s language and the data to follow. <\/p>\n","protected":false},"excerpt":{"rendered":"
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