S&P 500 Ends July Flat as Fed Decision Drives Rate-Sensitive Stocks

The S&P 500 index ended July essentially flat after a month of sharp swings, despite a hawkish Federal Reserve decision on July 29 that sent the market's worst single day since April 2025. The late-July rebound pushed the index back near its starting point, leaving investors to begin August with inflation, growth, and labor data still ahead.

The month's close masks the force of the move underneath it. Housing and other interest-rate sensitive stocks absorbed the brunt of the Fed's comments, while the 30-year Treasury yield climbed to its highest level since 2007, and short-term yields fell as traders reduced near-term hike odds.

Microsoft and Amazon earnings sparked a rebound in chip stocks, which had already been under pressure from AI-capex skepticism and a Korean memory-chip selloff. This helped the S&P 500 finish the month flat and lifted the Nasdaq Composite off its 100-day moving average late in July.

The Nasdaq Composite still posted a low-single digit decline for the month, but the late move left it closer to a technical floor than it had been earlier in July. The next level traders are watching is its 50-day moving average near 25,950.