Stock Market Today, July 29: Stocks Slide on Hawkish Fed and Increased Middle East Tensions

U.S. equities sold off sharply on July 29, 2026, after the Federal Reserve held rates steady but revealed a hawkish tilt: three officials dissented in favor of an immediate hike. The S&P 500 dropped 1.52%, the Dow fell 2.19%, and the Nasdaq declined 1.74%. A surprise Iranian missile attack escalated Middle East tensions, compounding pressure on risk assets.

The three-dissent vote signals the Fed remains concerned about inflation despite pausing. Energy stocks bucked the selloff, benefiting from oil's rally amid geopolitical uncertainty. Technology and industrials bore the brunt of losses, with the Nasdaq's 1.74% decline reflecting risk-off positioning as rate-hike odds climbed.

The combination of hawkish Fed signals and Middle East escalation created a dual headwind for equities. Energy outperformance underscores crude's sensitivity to supply-route concerns, while tech's underperformance reflects the sector's vulnerability to higher-for-longer rate expectations.