Markets finished higher in a volatile week as investors digested the Federal Reserve’s (Fed’s) latest decision, geopolitical tensions in West Asia, and corporate spending announcements.
The Nasdaq Composite (Nasdaq) rose 1% Friday, which helped it to a weekly rise of 1.6%, however it is still stuck below its 50-day moving average. The index ended July with a 3.2% decline, and has fallen in six of the past nine months. Its 2026 gain now sits at 9.2%.
The S&P 500 experienced a 0.7% lift Friday. The benchmark index climbed 1% for the week and is back above its 50-day line, a welcome development. However, it still ended July with a narrow loss of 0.1%. Its year-to-date gain now sits at 9.4%.
The Dow Jones Industrial Average ended up 0.5% Friday. This helped it outperform other major indexes in July, marking a monthly gain of 0.3%. It now sits above its major and short-term moving averages.
In economic news, U.S. second-quarter (Q2) gross domestic product (GDP) grew moderately and inflation data remained broadly inline with expectations as the June personal consumption expenditures (PCE) price index came in as expected. Consumer spending and income growth softened, while consumer confidence fell amid weaker business expectations.
Amazon.com (AMZN) soared 15.3% on Friday, following better-than-expected earnings.
Alphabet (GOOGL) and Microsoft (MSFT) shares were also strong. The trio added nearly $1.5 trillion in combined value this week. However, Apple weighed as it sold off 7.2% on weak guidance.
Treasury yields have climbed across the board, which could put more pressure on stocks. The 10-year Treasury yield popped 8 basis points to 4.74%, a 52-week high.
Oil prices rose amid ongoing turmoil in the Middle East, with West Texas Intermediate futures rising 1.1% to $84.49 per barrel.
Labor data will be the key theme for the week ahead, with the Job Openings and Labor Turnover Survey for June dropping Tuesday, the July ADP National Employment Report due Wednesday and weekly jobless claims data coming Thursday.
This sets the scene for the all-important U.S. jobs report for July, which comes Friday. The economy is seen adding 85,000 nonfarm payrolls vs. the prior month’s 57,000.
Also, earnings season continues apace. Key firms reporting include AMD, Sandisk (SNDK), Western Digital (WDC) and Caterpillar (CAT).
Please click here for the Looking Ahead report from the Wells Fargo Investment Institute. Below are excerpts from that research.
Week in review: July 27-31
Economic news
- The Fed left its target rates unchanged at 3.50% to 3.75% in a 9 – 3 vote, with the descents preferring a 25 basis point (.0.25%) hike. In his second meeting as Fed Chairman, Kevin Walsh provided limited guidance about future policy decisions, leaving investors with few clues about the path ahead.
- Bond markets, reacted negatively, with the yield on the 30-year Treasury bond rising above 5.2% as investors questioned how aggressively the Fed would combat inflation
- Stocks also moved lower following the announcement. The S&P 500 fell 1.5% on Wednesday, while the technology heavy Nasdaq endured a technical correction.
- PCE inflation rose 3.7% from a year ago in June and declined slightly from the prior month, in line with expectations.
- Personal spending increased 0.3% month-over-month (M/M), while personal income rose 0.2% M/M, both coming in slightly below economists’ expectations.
- The U.S. economy grew at a 1.5% annualized rate in Q2, supported by continued consumer spending and business investment, highlighting the economy’s underlying resilience.
- Consumer confidence declined in July, falling 1.4 points to 90.8 and missing economists’ expectations of 92.4.
- The decrease was driven primarily by weaker labor market sentiment, as the share of consumers who viewed jobs as “plentiful” fell to 24.6%, reflecting a more cautious outlook on employment conditions.
- Home prices increased 0.3% M/M in May, according to the Federal Housing Finance Agency, exceeding expectations of 0.1% M/M. The increase bought annual home price growth to 2.2% year-over-year.
- Durable goods orders rose 0.3% in June, below forecasts of 1.8% M/M, as weakness in the transportation sector weighed on results.
- June wholesale inventories rose 0.3% to $945.9 billion, slightly below expectations of 0.4% M/M.
Looking ahead to this week: August 3 – 7
U.S.
- The focus early in the week will be on the ISM July manufacturing and services purchasing managers’ indexes (PMIs) on Monday and Wednesday, respectively, before attention shifts to Friday’s jobs report. Other labor market updates include the July ADP survey of private employment and Challenger job cuts report, along with the June Job Openings and Labor Turnover Survey (JOLTS).
- Also due this week are July vehicle sales and June’s consumer credit, trade balance, factory orders, construction spending, and wholesale trade sales.
Asia
- In China, the highlight will be July’s consumer price index (CPI), producer price index (PPI), trade balance, foreign reserves, and private PMIs from RatingDog.
- From Japan, watch for July‘s finalized manufacturing and services PMIs, monetary base, and preliminary machine tool orders, along with June’s labor cash earnings, household spending, and preliminary leading index.
- Elsewhere in the region, South Korea’s July CPI, manufacturing PMI, and foreign reserves hit the tape. Australia’s economic calendar includes July’s manufacturing PMI and Melbourne Institute inflation gauge along with the June’s trade balance and household spending.
Europe
- In Europe, the focus will be on June’s Eurozone retail sales and PPI, along with finalized July PMIs.
- From France, look for June’s industrial production, trade balance, and budget balance, along with the Q2 unemployment rate and wages.
- German releases include June’s factory orders, retail sales, and trade balance.
