Apple, Amazon, and GDP Await After Fed Decision

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Thursday, July 30th. Another wave of potentially market-moving events awaits investors today, following a pivotal Wednesday that featured the Federal Reserve's latest policy decision and earnings from Microsoft and Meta. Attention now shifts to gross domestic product, or GDP, data and the Fed's preferred inflation gauge, the personal consumption expenditures or PCE price index due at 8.30 a.m.

0:48Eastern Time. Apple and Amazon then headline another busy earnings calendar after the closing bell. The packed schedule comes as markets remain on edge after renewed U.S.-Iran tensions pushed oil prices higher on Wednesday, while the sell-off in chip and AI infrastructure stocks intensified. President Trump said he will order retaliatory strikes in Iran following a surprise attack on U.S. forces Tuesday night, breaking a multi-day pause in fighting. Oil prices surged nearly 7 % after the announcement. The SIBO Volatility Index, or VIX, spiked roughly 12%. Treasury yields also rose across the curve until the Fed decision caused short-dated yields to give up their gains and head in the other direction.

1:38Turning to the Fed, the central bank held rates steady at its July meeting, as expected. Three officials dissented, however. The post-meeting statement noted that the dissenters would have preferred a 25-basis-point rate hike. In his post-meeting press conference, Fed Chair Kevin Warsh reiterated the central bank's commitment to price stability. Quote, We have begun a new chapter, and we understand that the five-plus years of inflation above target cannot be cured in nine weeks or by a single month of modest price decreases, end quote, he said. This Fed will not waver. After the press conference, markets plunged, leading the Dow Jones Industrial Average to post its worst day since April 2025.

2:23The chance of a rate hike at the Fed's September meeting whipsawed before ending the day at roughly 57 percent, according to the CME FedWatch tool. Futures traders had priced in a 55 percent chance of a September hike on Tuesday. The Fed will now have until its September meeting to monitor how inflation data evolves. Upside surprises could make a hike this year more likely, said Colin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research. The risk for the Fed is that inflationary pressures, including tariffs and the AI build-out, might keep growing while it waits for more data.

3:05While all eyes were on the Fed on Wednesday afternoon, tech earnings commanded investors' attention after the bell. Microsoft rose in early after-hours trading after topping earnings per share and revenue forecasts. Azure cloud revenue growth impressed, rising 43 % compared to the expected 39.6%. However, Meta plunged in early after-hours trading after missing earnings estimates. The company reported$6.18 in earnings per share on revenues of$60.8 billion, compared with expectations for$7.22 in earnings per share on revenues of$60.2 billion. Meta also increased the lower end of its full-year capital expenditures guidance range to$130 billion from$125 billion, even as free cash flow dwindled to$784 million from$8.5 billion a year ago.

4:04After the mixed earnings results from Microsoft and Meta, Apple and Amazon will be in the spotlight today. Consensus expects Apple to deliver 20 % Euro-over-year earnings per share growth, while revenues are seen rising 15 % to roughly$108 billion. Investors will track iPhone demand, services growth, and any AI strategy updates in the report. Tim Cook's final earnings call before former hardware chief John Turnus takes over or the CEO role will also be closely monitored. Amazon is expected to deliver earnings per share of$1.82 on revenue of roughly$196.5 billion, marking increases of 8.3 % and 17.2 % year-over-year, respectively.

4:51Investors will closely be tracking Amazon Web Services growth as they look for evidence of a return on investment from record AI spending. However, capital expenditures guidance and free cash flow may be the most important metrics to watch. Last quarter, Amazon's free cash flow turned negative amid its AI spending splurge. Before Apple and Amazon take center stage, today's earnings lineup will kick off with MasterCard, Shell, Anheuser-Busch InBev, Bristol-Myers Squibb, and Altria before the bell. There's also plenty of economic data to parse this morning. The first estimate of second quarter GDP growth then June's PCE price index data will likely draw the most attention.

5:35Consensus expects year-over-year GDP growth of 1.8%, which would mark a slight decrease from the first quarter's 2.1%. Anything significantly below that figure could put the Fed in a tough spot as it seeks to tame inflation without weakening the economy. PCE is seen rising 3.8 % year-over-year, down from 4.1 % in May. The expected slowdown in headline inflation largely reflects lower oil prices last month. With oil prices rising again, core PCE, which excludes more volatile food and energy prices, might attract more investor interest. Figures expected to match the 3.4 % seen in May. Looking ahead, tomorrow we'll bring the final reading of the University of Michigan's July Index of Consumer Sentiment.

6:25The preliminary release showed consumer sentiment jumping in July amid lower gasoline prices. However, with the national average back above$4 per gallon, according to the American Automobile Association, consensus expects a slight downturn in consumer sentiment this time out. As far as individual market movers on Wednesday, GE Healthcare Technologies surged 12.2 % after topping consensus estimates in its second quarter earnings report. The medical imaging and diagnostics company posted a record order backlog of$23.9 billion, with growth across every business segment. Seagate Technologies continued its rise after reporting blowout second-quarter earnings after the bell on Tuesday.

7:10The data storage firm saw its revenues jump 48.5 % year-over-year and offered strong revenue guidance amid steady AI-related demand. Meanwhile, Caterpillar sank 6.9 % after Baird downgraded the company to neutral from Outperform, citing state and local restrictions on data center construction, which could slow demand for the company's power generation business. KLA Corp plunged 10.8 % despite topping earnings and revenue estimates. The chip equipment maker's cautious near-term outlook appeared to spook investors. Arm Holdings fell more than 1 % in early after-hours trading despite reporting earnings and revenue that topped estimates and forecasting revenue for the current quarter that exceeded estimates.

7:57Lamb Research jumped more than 6 % immediately after the bell after topping market estimates for earnings and revenue. Qualcomm fell as much as 5 % in volatile trading after the bell. The maker of smartphone processors met earnings expectations and topped revenue estimates, but its profit forecast for the current quarter fell short. Overall, just three out of 11 S &P 500 sectors ended Wednesday in the green. Energy surged alongside oil prices, while information technology and industrials lagged. After steadily rising this week, market breadth weakened slightly on Wednesday. Roughly 66 % of S &P 500 stocks traded above their 50-day moving average, while 69 % traded above their 200-day moving average.

8:46The Dow Jones Industrial Average fell 1 ,153.18 points, or 2.19%, Wednesday, to 51 ,594.14. The S &P 500 Index sank 112.63 points, or 1.52%, to 7 ,316.15. And the NASDAQ composite dropped 433.97 points, or 1.74%, to 24 ,442.94. This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash marketupdate or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review. It really helps new listeners find the show. Join us for another update tomorrow.

9:47For important disclosures, see the show notes and schwab.com slash market update podcast.