Stock Market Suffers Losses Led by Tech Giant IBM: Today's Financial Update
In the world of finance, the Federal Reserve (Fed) held its July 29-30, 2025 meeting, maintaining interest rates steady at 4.25%-4.50% for the fifth consecutive time. Despite rising inflation pressures and economic moderation, no immediate cuts were announced[1][2][3].
The Fed's decision came with key points to watch. Rates were expected to remain unchanged, though dissent was expected, with Fed Governor Christopher Waller openly favoring a cut and a couple of governors dissenting to hold steady[1][3]. The Fed downgraded 2025 real GDP growth from 1.7% to 1.4%, unemployment was expected to rise slightly to 4.5%, and core PCE inflation forecasts increased to 3.1% (up from 2.8% in March)[1].
Market participants focused heavily on Fed Chair Powell’s wording for signs of data dependence or changes in policy direction, especially given softening labor momentum and tariff-driven inflation pressures[1][2]. Possible updates on the Fed's balance sheet/quantitative tightening were also expected, though interest rates remained the primary tool of focus[1].
Inflation was showing signs of upward pressure, partly from Trump-era tariffs increasing prices in trade-sensitive categories, pushing core inflation slightly above target and complicating the Fed’s potential move to cut rates soon[2][5]. Market expectations had priced in about a full percentage point of rate cuts by the end of 2026, but immediate cuts were deferred[2][5]. Treasury yields reacted to assurances about Fed Chair Powell’s position and the Fed’s rate-hold stance. The 10-year yield rose by over 3 basis points to about 4.37%, the 2-year yield ticked up near 3.85%, and the 30-year yield moved above 4.94%, reflecting market focus on interest rate levels and ongoing inflation risks[4].
In the stock market, Kohl's (KSS) saw a significant increase of 10.8% due to the meme-stock craze[1]. Alphabet's stock increased by 1.0%, while Tesla's stock decreased by 8.2%. Apple's stock slipped slightly, and Chevron's stock rose by 1.8% due to the administration allowing it to resume drilling operations in Venezuela[1].
Retail interest was particularly evident in the options market, with several retail favourite options names drawing massive trading volume. Opendoor Technologies (OPEN) enjoyed a 5.7% increase due to a meme-stock craze, and Krispy Kreme (DNUT) decreased slightly after a 26.7% gain on Tuesday and a 38.5% gap-up on Wednesday[1]. Microsoft's stock increased by 1.0%, and IBM's stock decreased by 7.6% despite exceeding estimates and solidifying full-year guidance[1].
The S&P 500 closed at a new high of 6,363, and the Nasdaq Composite also made a new closing high at 21,058[1]. The Dow Jones Industrial Average closed at 44,693, down 0.7%[1]. Amazon.com's stock increased by 1.7%, and Stifel analyst David Grossman reiterated his Buy rating and his $310 12-month target price for IBM[1].
In the bond market, the yield on the 2-year Treasury note increased to 3.912%, and the yield on the 10-year U.S. Treasury note rose to 4.402%[1]. The 30-year yield inched back to 4.948%[1].
In conclusion, the Fed's decision to pause on changing rates signalled caution amid a slightly weaker economy but persistent inflation above target. Inflation expectations remained somewhat elevated, and Treasury yields adjusted slightly upward in response to the Fed’s steady policy and assurances about leadership stability[1][2][3][4][5].
[1] CNBC, "Fed leaves interest rates unchanged, signals caution amid a slightly weaker economy but persistent inflation above target," July 30, 2025. [2] Bloomberg, "Fed Holds Rates Steady, Signals Caution Amid Inflation Pressures," July 30, 2025. [3] Wall Street Journal, "Fed Holds Rates Steady, Signaling Caution Amid Inflation Pressures," July 30, 2025. [4] MarketWatch, "Treasury yields rise as Fed signals no immediate rate cuts," July 30, 2025. [5] Reuters, "Fed holds rates steady, signals caution as inflation pressures persist," July 30, 2025.
Investors closely monitored the Fed's consensus regarding interest rates, with some governors advocating for cuts to combat inflation and others opting for steadiness. The stock market responded to the Fed's announcement, leading to a rise in Kohl's (KSS) shares, among others, while the S&P 500 and Nasdaq Composite reached new highs [1]. In the bond market, the yield on the 2-year Treasury note increased in response to the Fed’s steady policy and assurances about leadership stability, ultimately influencing the trajectory of investments and trading activities [1][2][3][4][5].
