Dow Sheds 1,153 Points as a Divided Fed Holds Rates and Oil Tops $90 on Fresh Iran Strikes

Wall Street's Worst Session in Months as the Fed Signals It's Not Done Fighting Inflation

Fed Holds Rates at 3.50%–3.75% but Three Officials Wanted a Hike

• The Federal Reserve voted 9-3 to hold its benchmark rate at 3.50%–3.75%, extending a pause that has lasted since January. Three regional presidents — Beth Hammack, Neel Kashkari, and Lorie Logan — dissented in favor of raising rates a quarter point, the most hawkish dissent tally of Chair Kevin Warsh's tenure.
• The FOMC's statement said inflation remains above the Fed's 2% goal, "in part because of supply shocks driving price increases in sectors such as energy," and cited the Middle East conflict as a source of elevated uncertainty even as the committee described the economy as still expanding at a solid pace.
• The hawkish tone sent Treasury yields higher, with the 30-year yield climbing to its highest level since 2007, as investors priced in a longer wait for the next rate cut.
• Equities sold off sharply on the news: the Dow fell ▼ 2.19% to 51,594.14, its steepest drop in months, while the S&P 500 lost ▼ 1.52% and the Nasdaq gave back ▼ 1.74%.

SK Hynix's Earnings Miss Reignites AI-Sustainability Fears

• South Korea's SK Hynix reported a 1,242% jump in quarterly profit on booming AI-chip demand, but the results still missed Wall Street's forecasts — sending its shares down roughly 10% overnight and rattling sentiment across the global semiconductor trade.
• The disappointment dragged down U.S. chip and AI-adjacent names: Nvidia fell ▼ 3.6%, Qualcomm dropped ▼ 4.42%, and Tesla slid ▼ 3.0%, while Meta eased ▼ 1.31% and Microsoft slipped ▼ 0.71%.
• Industrials were the day's weakest sector, down roughly 3.42%, led by Caterpillar's ▼ 6.9% slide after an analyst downgrade and Deere's ▼ 4.5% drop on agricultural-sector headwinds.
• Energy was the bright spot as Brent crude surged more than 7% past $90 a barrel following fresh Iranian military action, lifting Exxon Mobil and Chevron even as the same oil spike weighed on the broader market's inflation outlook.

Earnings Beats Powered the Day's Biggest Gainers

• Garmin led the S&P 500, jumping ▲ 16% after a strong second-quarter report, followed by GE HealthCare, up ▲ 11.6% on its own earnings beat.
• Sherwin-Williams climbed ▲ 8.3% and Coca-Cola added ▲ 5.0%, helping consumer-staples names offset some of the day's broader losses.
• Ford rose ▲ 5.6% after beating earnings estimates and raising its 2026 guidance on production strength, one of the clearest bright spots in an otherwise red session.
• Health care was a relative haven, with the Health Care Sector SPDR up 2.4% even as most other sectors closed lower.

A Broad Selloff Across All Four Major Benchmarks

• The Dow Jones Industrial Average led index declines, falling ▼ 2.19% to 51,594.14, while the S&P 500 dropped ▼ 1.52% to 7,316.15 and the Nasdaq Composite fell ▼ 1.74% to 24,442.94. The Russell 2000 slid ▼ 1.61% to 2,906.31.
• Measured against last Friday's close, the S&P 500 is down roughly ▼ 1.29% for the week, the Nasdaq is off ▼ 2.13%, the Dow has slipped ▼ 0.68%, and the Russell 2000 has eased ▼ 0.81%.
• Gold held mostly steady near $4,024 an ounce, still up more than 25% since the start of 2025, as investors weighed safe-haven demand against the hawkish Fed stance.
• The 30-year Treasury yield climbed to its highest level since 2007 as the Fed's dissent-marked hold pushed traders to price in a longer wait for the next rate cut.

What to Watch the Rest of This Week and Into August

• Markets head into Thursday and Friday still digesting the Fed's hawkish hold, with traders watching for any sign of de-escalation in the U.S.-Iran conflict that sent oil above $90 a barrel.
• Palantir Technologies kicks off next week's earnings Monday, August 3, after the close.
• A packed slate follows Tuesday, August 4: Caterpillar, Merck, McDonald's, and Pfizer report before the open, while AMD and Amgen report after close — AMD's results will be watched closely for read-through on the AI-chip jitters sparked by SK Hynix.
• Eli Lilly and Walt Disney report Wednesday, August 5, the same day as the July ADP employment report and ISM services index.
• The July jobs report lands Friday, August 7, with nonfarm payrolls and the unemployment rate serving as the next major data point for the Fed's path after this week's three-way dissent.