U.S. stocks gave up early gains and finished the trading session mixed as the NASDAQ was able to hold positive territory on the heels of Dow member Apple’s favorable earnings report. Trade concerns flared as the Trump administration is expected to announce an increase to the tariffs levied on select Chinese imports. In economic developments, the Fed concluded its monetary policy meeting and announced no changes to its current stance, while domestic manufacturing data came in shy of expectations. Treasury yields and the U.S. dollar rose. Gold and crude oil prices traded lower.

The Dow Jones Industrial Average (DJIA) declined 81 points (0.3%) to 25,334, the S&P 500 Index dipped 3 points (0.1%) to 2,813, and the NASDAQ Composite gained 36 points (0.5%) to 7,707. In moderate-to-heavy volume, 786 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil fell $1.10 to $67.66 per barrel and wholesale gasoline lost $0.03 to $2.05 per gallon. Elsewhere, the Bloomberg gold spot price declined $7.74 to $1,216.41 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.1% at 94.66.

At 2:00 p.m. ET, the Federal Open Market Committee (FOMC) concluded its two-day monetary policy meeting. As expected, the Fed left its target range for the Fed funds rate unchanged at 1.75%-2.00%. In its released statement, the Committee relayed that since it last met in June “the labor market has continued to strengthen and that economic activity has been rising at a strong rate.” The vote to maintain the target range was unanimous and in regard to future changes, the Committee stated that it “will assess realized and expected economic conditions,” and that the “assessment will take into account a wide range of information.”

The Institute for Supply Management (ISM) Manufacturing Index for July declined to 58.1 from the unrevised 60.2 in June, versus the Bloomberg forecast calling for a dip to 59.4, with a reading above 50 denoting expansion. New orders declined but remained above 60, and production decreased 3.8 points to 58.5, while employment nudged further into solid expansion territory. Supplier deliveries fell, but stayed north of 60, and order backlogs dropped 5.4 points to 54.7, while new export orders showed growth decelerated. ISM said respondent comments continued to reflect expanding business strength but respondents are again overwhelmingly concerned about how tariff-related activity, including retaliation, will continue to affect their business.

The ADP Employment Change Report showed private sector payrolls rose by 219,000 jobs in July, above forecasts of a 186,000 gain, while June’s increase of 177,000 jobs was revised to a 181,000 rise. Today’s ADP data, which does not include government hiring and firing, comes ahead of Friday’s broader July nonfarm payroll report, expected to show headline and private sector job growth both rose by 190,000. The unemployment rate is forecasted to dip to 3.9% from 4.0% and average hourly earnings are projected to rise 0.3% month-over-month (m/m).

Construction spending fell 1.1% m/m in June, versus projections of a 0.3% increase, and following May’s noticeable upward revision to a 1.3% gain. Residential spending declined 0.5% m/m, and non-residential spending fell 1.6%.

Schwab Center for Financial Research – Market Analysis Group

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