Equity Markets Close Mixed as Powell Cites Tariffs for Unchanged Rates

04:31 PM EDT, 07/01/2025 (MT Newswires) -- US benchmark equity indexes closed mixed on Tuesday after Federal Reserve Chair Jerome Powell said the central bank held off on cutting interest rates in response to tariffs announced by President Donald Trump.

The Nasdaq was down 0.8% to 20,202.89 while the S&P 500 decreased 0.1% to 6,198.01. The Dow Jones Industrial Average rose 0.9% to 44,494.94. Among sectors, materials led the gainers, while communication services and technology were the lone decliners.

US Treasury yields were higher, with the 10-year rate increasing 2.5 basis points to 4.25% and the two-year rate rising 5.8 basis points to 3.78%.

August West Texas Intermediate crude oil gained 0.9% to $65.71 a barrel on Tuesday.

Powell indicated Tuesday that the Federal Open Market Committee would have lowered its benchmark lending rate by now had President Donald Trump not announced tariffs, CNBC reported.

Last month, the FOMC kept interest rates unchanged for a fourth consecutive meeting. Trump has repeatedly called on the Fed to reduce rates.

"In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the (US) went up materially as a consequence of the tariffs," Powell reportedly said Tuesday.

In economic news, two surveys painted a mixed picture of the US manufacturing sector for June, with Institute for Supply Management data showing a fourth straight monthly contraction and S&P Global (SPGI) indicating faster expansion.

The ISM survey's details point to "continued struggles" for domestic manufacturers, Oxford Economics said. "Demand uncertainty and bartering over who foots the tariff bill are leading to delays or cancellations in orders," the firm wrote. "Until tariff policies and geopolitical issues fade, this is unlikely to change."

US job openings unexpectedly rose in May with vacancies increasing to about 7.8 million as of the last day of May from 7.4 million the month before, according to the Bureau of Labor Statistics. The consensus was for a 7.3 million level in a survey compiled by Bloomberg.

"The labor market is still tight," BMO Senior Economist Jennifer Lee said in a report.

In company news, Packaging Corp. of America (PKG) shares were up 7.6%, among the top performers on the S&P 500. The company agreed to purchase the containerboard business of Greif (GEF) for $1.8 billion in cash. Greif (GEF) shares were up 7.4%.

Hasbro (HAS) shares jumped 4.3%. The company said it signed new multi-year casino licensing partnerships with Galaxy Gaming, Aristocrat Technologies, Evolution and Bally's (BALY) to develop and distribute games based on its leading brands. Bally's shares rose 16%.

GE Vernova (GEV) shares fell 4.4% even after Deutsche Bank raised the price target on its stock to $563 from $546 and maintained a buy rating.

Gold increased 1.3% to $3,349.10 per troy ounce, and silver was up 0.1% to $36.21 per troy ounce.

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