Dow Tumbles Over 800 Points as Fed Stands Pat, Oil Surges 7% on Middle East Turmoil

U.S. stocks tumbled across the board on July 29. As of intraday, the Dow Jones Industrial Average sank more than 800 points, a drop of roughly 2%; the Nasdaq Composite shed over 1%; and the S&P 500 fell about 1.2%. The selloff came after the Federal Reserve held interest rates steady but exposed deepening internal divisions, while a sudden escalation in the Middle East sent volatility spiking.

On the sector front, technology shares broadly declined, with AI-linked names including Nvidia and Meta under pressure. Energy stocks bucked the trend, rallying as crude prices soared more than 7%. Ford Motor bucked the downtrend after raising its full-year profit guidance.

Fed Holds Steady, Rare Dissents Emerge

The Federal Open Market Committee voted 9-to-3 to keep the federal funds rate unchanged at 3.50%-3.75%, marking the fifth consecutive pause. However, three regional Fed presidents — Beth Hammack of Cleveland, Lorie Logan of Dallas, and Neel Kashkari of Minneapolis — dissented in favor of a 25-basis-point rate hike, the first significant split since Kevin Warsh assumed the chairmanship. The statement reaffirmed the price stability mandate, noting that the economy is expanding at a solid pace while inflation remains above the 2% target.

Middle East Tensions Flare, Oil Prices Jump Over 7%

Iran launched missiles at a U.S. military base, and former President Trump vowed retaliation, sharply elevating geopolitical risk. International crude prices surged more than 7% in response. Energy stocks rallied against the broader market, with ExxonMobil and Chevron among the gainers.

Tech Stocks Slide as Street Awaits Meta and Microsoft Earnings

Nvidia (NVDA) and Meta (META) moved lower intraday, while TSMC (TSM) dropped over 3%. Short interest in Microsoft has climbed to its highest level since 2015, with roughly 92 million shares sold short, reflecting growing skepticism about returns on massive AI capital expenditures. Meta is set to report Q2 results after the close, with analysts forecasting revenue of $60.17 billion and earnings per share of $7.22. Tesla (TSLA) slid below the $300 mark, hitting a one-year low after multiple banks cut their price targets following the company's earnings report.

In other movers, Ford Motor (F) rose against the tide after lifting its full-year profit outlook; Coca-Cola (KO) hit an all-time high following a strong Q2 report, with Berkshire Hathaway's stake gaining more than $5 billion in value. Bitcoin edged up roughly 1%.