US open: Stocks higher despite slightly hotter than expected PCE reading
By Iain Gilbert
Date: Thursday 31 Jul 2025
(Sharecast News) - Major indices were in the green early on Thursday as traders digested news that US inflation registered its biggest rise in four months and that the Federal Reserve had voted to keep its benchmark overnight interest rates unchanged.
As of 1435 BST, the Dow Jones Industrial Average was up 0.22% at 44,559.85, while the S&P 500 advanced 0.75% to 6,410.53 and the Nasdaq Composite came out of the gate 1.24% firmer at 21,391.54.
The Dow opened 98.57 points higher on Thursday, reclaiming some losses recorded in the previous session after the Federal Reserve held interest rates steady at an effective rate of 4.3%, with just governors Michelle Bowman and Christopher Waller dissenting.
Chairman Jerome Powell indicated that the central bank wasn't ready to cut interest rates just yet, despite pressure from the president, as the Fed head seemingly wanted to take a little longer to assess the full impact of Donald Trump's higher tariffs on US inflation.
Traders also parsed Powell's comments at a press conference for insights into the central bank's next move, with the chairman saying that the Fed had "made no decisions" about a potential policy shift come September.
"Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem," said Powell. "Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen."
Thursday's primary focus looked set to be news that inflation showed renewed momentum in June, with the Bureau of Economic Analysis reporting a 0.3% monthly increase in its personal consumption expenditures price index, the Federal Reserve's preferred inflation measure.
On a year-on-year basis, headline PCE inflation reached 2.6%, while core inflation stood at a slightly firmer 2.8% clip, suggesting that inflation remains sticky despite the central bank's prolonged rate pause. Core PCE, which excludes volatile food and energy components, also rose 0.3% month-on-month. Analysts had expected core PCE to rise 2.7% year-on-year, while headline PCE also came in ahead estimates of 2.5%.
The data comes ahead of the Federal Reserve's next policy meeting and could go a long way to reinforce expectations for a cautious stance on interest rates from the central bank.
Elsewhere on the macro front, Challenger, Gray and Christmas said US employers had announced 62,075 job cuts in July, up 29% month-on-month and 140% year-on-year, well above post-Covid averages for July. Year to date, US firms have announced 806,383 job cuts, the highest rate seen since 2020. "We are seeing the Federal budget cuts implemented by DOGE impact non-profits and healthcare in addition to the government. AI was cited for over 10,000 cuts last month, and tariff concerns have impacted nearly 6,000 jobs this year," said Andrew Challenger.
On another note, Americans lined up for unemployment benefits at an accelerated pace in the week ended 26 July, according to the Labor Department. Initial jobless claims increased by 1,000 to 218,000 from the prior week's unrevised level, while continuing claims were unchanged from the previous week's downwardly revised 1.94m print. Meanwhile, the four-week moving average, which aims to strip out week-to-week volatility, decreased by 3,500 to 221,000.
Still to come, July's Chicago PMI will be published at 1445 BST.
In the corporate space, Meta Platforms crushed Q2 earnings expectations overnight despite heightened AI investment, while Microsoft said quarterly profits had soared by nearly a quarter on the back of improved cloud computing revenues.
Comcast beat on the top and bottom lines as wireless and Peacock growth offset broadband losses, Bristol-Myers Squibb raised FY revenue guidance after a strong growth portfolio performance, CVS Health surged past expectations and hiked guidance again, Shake Shack topped estimates with margin expansion and unit growth, and Mastercard beat estimates with 17% revenue growth and $4.15 EPS, powered by strong cross-border and purchase volumes.
Tech giants Amazon and Apple will publish their latest quarterly figures after the close.
Reporting by Iain Gilbert at Sharecast.com
Dow Jones - Risers
Unitedhealth Group Inc. (UNH) $266.04 1.90%
Caterpillar Inc. (CAT) $434.12 0.95%
JP Morgan Chase & Co. (JPM) $299.63 0.87%
Cisco Systems Inc. (CSCO) $68.28 0.46%
McDonald's Corp. (MCD) $303.61 0.31%
Microsoft Corp. (MSFT) $513.24 0.13%
Walgreens Boots Alliance, Inc. (WBA) $11.63 0.09%
Dowdupont Inc. (DWDP) $0.00 0.00%
Boeing Co. (BA) $225.84 -0.11%
Visa Inc. (V) $350.91 -0.11%
Dow Jones - Fallers
Dow Chemical Co. (DOW) $23.92 -5.00%
3M Co. (MMM) $146.62 -3.41%
Procter & Gamble Co. (PG) $152.88 -2.38%
Chevron Corp. (CVX) $153.56 -2.21%
Nike Inc. (NKE) $76.68 -2.11%
American Express Co. (AXP) $303.41 -1.66%
Home Depot Inc. (HD) $372.08 -1.39%
Merck & Co. Inc. (MRK) $81.75 -1.06%
Apple Inc. (AAPL) $209.05 -1.05%
Salesforce.Com Inc. (CRM) $264.81 -0.96%
S&P 500 - Risers
Harley-Davidson Inc. (HOG) $26.02 13.38%
Humana Inc. (HUM) $261.47 12.40%
Electronic Arts Inc. (EA) $156.26 5.73%
NRG Energy Inc. (NRG) $166.59 4.20%
CVS Health Corp (CVS) $62.30 3.83%
Altria Group Inc. (MO) $61.50 3.61%
Arista Networks Inc. (ANET) $122.09 2.93%
VF Corp. (VFC) $12.72 2.58%
Micron Technology Inc. (MU) $114.74 2.48%
Estee Lauder Co. Inc. (EL) $93.66 2.47%
S&P 500 - Fallers
Unum Group (UNM) $71.11 -12.18%
Freeport-McMoRan Inc (FCX) $39.14 -9.46%
Essex Prty Trust Inc. (ESS) $268.46 -7.64%
Mondelez International Inc. (MDLZ) $65.10 -6.61%
Verisk Analytics Inc. (VRSK) $275.47 -6.32%
Republic Services Inc. (RSG) $231.69 -5.82%
LyondellBasell Industries (LYB) $58.85 -5.81%
Boston Properties Inc. (BXP) $66.43 -5.68%
PPG Industries Inc. (PPG) $106.25 -5.33%
Hanesbrands Inc. (HBI) $4.11 -5.08%
Nasdaq 100 - Risers
Electronic Arts Inc. (EA) $156.26 5.73%
Micron Technology Inc. (MU) $114.74 2.48%
Nvidia Corp. (NVDA) $179.27 2.14%
Broadcom Inc. (AVGO) $302.62 1.75%
Synopsys Inc. (SNPS) $645.35 1.50%
Netflix Inc. (NFLX) $1,184.20 1.32%
Cadence Design Systems Inc. (CDNS) $371.03 1.30%
Western Digital Corp. (WDC) $71.43 1.16%
Biomarin Pharmaceutical Inc. (BMRN) $58.81 1.00%
T-Mobile Us, Inc. (TMUS) $241.58 0.97%
Nasdaq 100 - Fallers
Check Point Software Technologies Ltd. (CHKP) $186.67 -14.50%
Mondelez International Inc. (MDLZ) $65.10 -6.61%
Verisk Analytics Inc. (VRSK) $275.47 -6.32%
Qvc Group Inc Series A (QVCGA) $3.94 -5.29%
DENTSPLY Sirona Inc. (XRAY) $15.47 -3.97%
Seagate Technology Plc (STX) $147.42 -3.45%
Paypal Holdings Inc (PYPL) $69.71 -2.44%
Trip.com Group Limited (TCOM) $61.73 -2.22%
J.B. Hunt Transport Services Inc. (JBHT) $143.87 -1.98%
Illumina Inc. (ILMN) $106.66 -1.89%
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