US indices show rotation from mega-cap tech as key earnings and the Fed decisions approach. Trade uncertainty persists. WTI crude rallies on geopolitical news while Asian markets are mixed.
US stocks pulled back ahead of key earnings & FOMC, JPY strengthened, WTI spiked
Profit-taking activities were seen in the US stock market on Tuesday, 29 July, ahead of today’s two key mega-cap stocks’ Q2 earnings results; Microsoft and Meta Platforms, as well as the US Federal Reserve’s monetary policy decision, followed by Fed Chair Powell’s press conference.
The S&P 500 and Nasdaq 100 rallied at the start of yesterday's US session to print another fresh all-time intraday high of 6,409 and 23,511, respectively, before reversing to the downside to record losses of -0.3% and -0.2% by the end of the US session, dragged down by several mega-cap technology stocks; Meta Platforms (-2.5%), Apple (-1.3%), and Nvidia (-0.7%).
Interestingly, other industry sectors of the S&P 500 managed to ink out gains and outperformed, such as the defensive and lower beta sectors: Real Estate (1.6%), Utilities (1%), and Consumer Staples (0.7%). Therefore, yesterday’s sell-off seen in the major US stock indices is likely a rotation play rather than the start of a potential medium-term (multi-week to multi-month) corrective decline phase.
US and Chinese officials ended the third round of trade negotiations in Stockholm on Tuesday, 29 July, with conflicting messages conveyed from both sides. Chinese lead trade negotiator Li Chenggang told reporters that the 12 August trade truce deadline will be extended.
On the contrary, US Treasury Secretary Bessent, who led the US trade delegation, highlighted that the 90-day extension for the deadline of the US-China trade truce is not “guaranteed”, and US President Trump will make the final call.
Mixed intraday performances were seen in Asia Pacific stock markets today, arising from the uncertainty of the trade truce status between the US and China.
Hong Kong’s Hang Seng Index dropped by -1.7%, its worst intraday performance since 19 June 2025, and Singapore’s Straits Times Index declined for the fourth consecutive session with an intraday loss of -0.4%. Meanwhile, Japan’s Nikkei 225’s prior bearish momentum seen in the previous three sessions has started to ease as it recorded a minor loss of -0.1%.
In today’s Asia session, the US dollar trimmed its gains recorded in the previous two sessions, ex-post US-EU trade deal announcement, as market participants continue to price in a high chance of 67% that the Fed is likely to enact its first interest rate cut of 25 basis points in 2025 at the next FOMC meeting on 17 September ahead of today’s FOMC meeting according to the CME FedWatch tool.
Therefore, the Fed funds futures traders seem to anticipate a dovish tilt from Fed Chair Powell during the press conference. The Japanese yen is leading among the major currencies with an intraday gain of 0.3% against the greenback.
The West Texas crude oil spiked up yesterday with a daily gain of 3.4% to close at US$70.10/barrel, its second consecutive session of positive performance of more than 2%. It broke above its key 200-day moving average at US$68.40, which kept the bulls in check for the past four weeks.
US President Trump’s threat to Russia, where he reiterated that the US may impose additional levies on Russia unless it reaches a truce with Ukraine within ten days.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
