Oil Rises, Asian Stocks Drop as Nasdaq Faces AI Pressure
Wednesday 29 July 2026
Fed Holds Rates as Tech Earnings & US-Iran Tensions Drive Markets
The Federal Reserve left its benchmark interest rate unchanged on Wednesday, 29 July, while investors also digested mixed earnings from Microsoft and Meta Platforms and monitored fresh geopolitical developments involving Iran and the United States.
Together, monetary policy, corporate earnings and geopolitical risks continued to influence sentiment across global financial markets.
TL;DR
The Fed kept interest rates unchanged, although three officials dissented in favour of a 25-basis-point rate hike, highlighting continued concerns about inflation.
Microsoft beat fourth-quarter revenue and earnings expectations, with Azure generating more than $100 billion in annual revenue for the first time, driven by AI demand.
Meta reported weaker-than-expected quarterly results, causing its shares to decline in after-hours trading as investors reacted to softer financial performance.
Markets continued to monitor ongoing developments between Iran and the United States, with geopolitical uncertainty remaining a key focus for investors.
Crude oil prices remained volatile as traders weighed Middle East tensions, the Fed's policy decision, and corporate earnings.
Key developments
FOMC Decided on Rates
The Federal Open Market Committee (FOMC) voted to keep interest rates unchanged, although the decision revealed an unusually divided committee. Three Federal Reserve officials dissented in favour of a quarter-point rate increase, highlighting ongoing concerns that inflation risks remain elevated despite expectations that rates would stay on hold. The decision marked another sign that policymakers remain cautious as they assess inflation, economic growth and the potential impact of higher energy costs. (Source: Finance Yahoo)
Tech Giants Reported Earnings
Microsoft delivered stronger-than-expected fiscal fourth-quarter results, driven by continued momentum in its cloud computing business. Azure revenue surpassed the $100 billion annual run-rate milestone for the first time, while both revenue and earnings exceeded analysts' expectations. The results reinforced investor confidence in Microsoft's continued expansion in artificial intelligence infrastructure and enterprise cloud services.
Meta Platforms reported quarterly results that fell short of market expectations, sending its shares lower in after-hours trading. Investors focused on softer-than-expected financial performance despite the company's ongoing investments in artificial intelligence and digital advertising technologies. The earnings release highlighted continued scrutiny over spending levels and future revenue growth.
US-Iran Tensions Caused Oil Price Volatility
Geopolitical tensions also remained firmly on investors' radar following new developments involving Iran and the United States. According to CNN's live coverage, diplomatic and military developments continued to evolve, with markets monitoring the situation for potential implications for regional stability and global energy supplies.
Oil prices remained volatile as traders balanced geopolitical risks against broader market concerns. Crude prices fluctuated, yesterday, alongside the Federal Reserve's decision, corporate earnings releases and continued uncertainty surrounding developments involving Iran. Energy markets remain particularly sensitive to any disruption affecting Middle Eastern supply routes, making oil prices an important variable for inflation expectations and broader market performance.
Conclusion
Financial markets continue to navigate several major themes simultaneously, including the Federal Reserve's cautious policy stance, the strength of large-cap technology earnings and evolving geopolitical risks in the Middle East. With Microsoft demonstrating continued AI-driven growth, Meta facing investor disappointment and oil prices responding to developments involving Iran, investors remain focused on the interaction between corporate performance, monetary policy and geopolitical events.
*Past performance does not guarantee future results. The above is for marketing and general informational purposes only, and are only projections and should not be taken as investment research, investment advice or a personal recommendation.
FAQs
Why did the Federal Reserve leave interest rates unchanged?
The Federal Reserve maintained its current policy stance as it continues to assess inflation, labor market conditions, and broader economic data. However, three policymakers voted in favor of raising rates, underscoring differing views on inflation risks.
Why were Microsoft's earnings important?
Microsoft exceeded analyst expectations, with strong growth in its Azure cloud business. The company also announced that Azure's annual revenue surpassed $100 billion, reinforcing investor confidence in AI-related growth.
Why did Meta's stock fall after earnings?
Meta reported quarterly results that missed market expectations, leading to a decline in its share price as investors assessed slower-than-expected financial performance and continued spending on AI initiatives.
How are Iran-US developments affecting markets?
Geopolitical developments involving Iran and the United States have kept investors focused on potential risks to regional stability and global energy supplies, contributing to increased market uncertainty.
Why are oil prices moving?
Oil prices have been influenced by a combination of geopolitical developments in the Middle East, the Federal Reserve's interest rate decision, and broader market sentiment following major corporate earnings releases.
What should investors watch next?
Markets will continue to monitor upcoming economic data, Federal Reserve commentary, additional corporate earnings reports, and any new developments involving Iran that could affect global energy markets.
