4:10pm: Powell tension lingers
US stocks closed modestly higher on Tuesday, with gains across all major indexes despite renewed political uncertainty over the future of Federal Reserve Chair Jerome Powell.
The Dow Jones Industrial Average rose 231 points, or 0.5%, to finish at 44,255. The S&P 500 added 20 points, or 0.3%, to close at 6,264, while the Nasdaq Composite gained 53 points, also 0.3%, to end at 20,730. The small-cap Russell 2000 outperformed, climbing 1.1% to 2,229.
Investors digested conflicting signals from Washington after reports surfaced that former President Donald Trump, the presumptive Republican nominee, had drafted a letter to fire Fed Chair Powell and had discussed the move with House Republicans. While Trump later denied the reports, he left the door open, calling Powell’s removal “highly unlikely” unless fraud were uncovered.
Analysts at Deutsche Bank noted that while they previously viewed such a move as unlikely due to its potential to undermine Fed independence and roil financial markets, the risk has now increased. “Removing Powell could come with costs and not necessarily provide the desired benefits,” they wrote, adding that bond yields could rise and inflation expectations increase if the central bank’s autonomy is called into question.
Markets will be watching closely in the coming weeks, especially as the next Senate recess — a window that could allow Trump to make a temporary appointment — begins on August 4.
3:45pm: Proactive news headlines
- Happy Creek Minerals increased its non-brokered private placement to C$3.75 million due to strong investor demand, with units priced at C$0.07 and C$0.05.
- NanoViricides is preparing for Phase II clinical trials of its Mpox treatment in Africa following a WHO emergency extension due to rising virus cases.
- Nevis Brands signed an exclusive distribution deal with ZT Distribution Inc. to bring its Happy Apple THC beverage to over 1,000 retail locations in the U.S. Midwest.
- Bit Digital announced that its high-performance computing arm, WhiteFiber Inc., has filed for a Nasdaq IPO under the ticker "WYFI".
- OKYO Pharma reported positive Phase 2 results for its eye pain treatment urcosimod, with 75% of patients experiencing over 80% pain relief.
- North Bay Resources began mobilization for test mining at its Fran Gold Project in British Columbia after reporting a high-grade gold assay.
- Nextech3D.AI launched support for USDC, USDT, and ACH payments on its MapD platform as part of its digital-first financial upgrade.
- Corero Network Security shares fell 33% after warning that full-year results would miss expectations, despite a 25% increase in recurring revenue.
- Alien Metals shares jumped 17% after drilling at its Elizabeth Hill project returned high-grade silver, including 1m at over 15,000 g/t.
- Caledonia Mining raised its 2025 production guidance following record second-quarter output of 21,070 ounces at its Blanket Mine in Zimbabwe.
- KEFI Gold and Copper has begun resettlement efforts at its Tulu Kapi project in Ethiopia ahead of full-scale development, with compensation payments now underway.
- Itaconix expanded its partnership with Croda by adding a powder-based odor-neutralizing product to its existing plant-based chemicals lineup.
- Empire Metals made key technical hires and formed a new consultancy partnership as it ramps up testing at its titanium project in Western Australia.
- Tryptamine Therapeutics strengthened its TRP-8803 clinical team with two senior hires ahead of a world-first trial for Binge Eating Disorder.
- Lumos Diagnostics secured a six-year U.S. distribution deal worth up to US$317 million for its FebriDx® test, pending FDA clearance.
- Prescient Therapeutics launched its first U.S. clinical site for the Phase 2a trial of PTX-100, expanding its global study to include top-tier U.S. research centers.
3:00pm: Stocks on the move
- Ford Motor Company shares fell nearly 3% after announcing a recall of about 694,000 U.S. vehicles due to fuel injector issues that could lead to engine fires.
- Morgan Stanley beat second-quarter earnings estimates on strong trading revenue, but rising credit loss provisions pressured its share price.
- NanoViricides is preparing for Phase II clinical trials in Africa following the WHO's extension of the Mpox virus emergency amid a surge in Clade I cases.
- Bit Digital announced that its subsidiary WhiteFiber Inc. has filed for a U.S. IPO and plans to list under the ticker "WYFI" on the Nasdaq Capital Market.
- Johnson & Johnson reported stronger-than-expected Q2 earnings and raised its full-year outlook, driven by robust sales in oncology and medical devices.
- Corero Network Security shares plunged 33% after warning of a revenue and earnings shortfall, despite 25% growth in annualised recurring revenue.
- Rio Tinto and Antofagasta shares rose 2% each after both miners posted solid Q2 operational updates, with Rio praising "excellent" mine performance.
2:35pm: Trump: 'not planning on doing anything'
Donald Trump has drafted a letter to fire Federal Reserve Chair Jerome Powell and circulated it among House Republicans, according to The New York Times.
While no final decision has been made, Trump is reportedly giving the move serious consideration, with a White House official telling CNBC: “The President asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he likely will soon.”
Trump has publicly wavered on the matter. When asked directly if he plans to fire Powell, he responded he's "not planning on doing anything,” but added that the Fed chair position “is not hard if you're smart” and hinted that White House adviser Kevin Hassett is someone he would consider for the role.
Asked whether he ruled out firing Powell, Trump replied, “I don't rule out anything,” and floated the possibility of “fraud involved” in the Fed's building renovation as a potential cause for dismissal—though he claimed, “I haven't drafted a letter.”
The turmoil comes just hours before a planned meeting between Powell and House Republicans on the Financial Services Committee, which was abruptly canceled, according to Semafor. Trump also downplayed the urgency, saying, “We get to make a change in 8 months,” referring to the expiration of Powell’s term in early 2026.
12:50pm: Travel discounts offset tariff impact
US producer prices came in cooler than expected in June, with lower costs for travel services helping offset the upward pressure from tariffs, according to Bill Adams, Chief Economist at Comerica Bank.
"Big drops in airfares and hotel rates offset the effects of higher goods prices this June," Adams said. "Discretionary consumer spending was wobbly in the second quarter, which led to discounting of travel services."
Despite a notable rise in durable consumer goods prices—the largest two-month gain since mid-2022—overall inflation remained subdued. Adams noted that tariffs are starting to raise goods prices, but their impact is being tempered for now by declines in nontraded service costs.
The soft reading on producer prices suggests a similarly subdued outcome for broader inflation measures. “The PPI report suggests that the PCE price index was also flat in June, and that core PCE prices excluding food and energy inched down 0.1%,” Adams said.
He added that real GDP likely returned to growth in the second quarter due to a drop in imports, but noted that domestic demand was "lackluster," helping to keep inflation pressures in check.
With inflation softening and the labor market still relatively stable, Adams expects the Federal Reserve to hold interest rates steady at its upcoming policy meeting. However, if the current inflation trends continue, he said, “the Fed will likely be able to cut interest rates later in 2025.”
11:50am: Trump poised to fire Powell
Reports that President Donald Trump is likely to fire Federal Reserve Chair Jerome Powell have alarm over the future independence of the central bank and caused US markets to turn red.
A White House official confirmed that Trump has discussed removing Powell with congressional Republicans during a closed-door meeting, and multiple GOP lawmakers expressed support for the move.
The news sent the dollar sharply lower and dragged down major stock indexes, as investor confidence in the Federal Reserve’s stability wavered.
“Late afternoon reports suggest that the White House was likely to sack Jerome Powell soon,” said Chris Beauchamp, Chief Market Analyst at IG. “The news has put the dollar firmly on the back foot, but has dragged stocks lower too. The Fed chairman’s departure would leave the independence of the central bank in question.”
11:30am: Cautious reactions
Investors are reacting cautiously to strong US bank earnings, particularly from trading divisions, XTB's Kathleen Brooks says, amid concerns the surge in revenues won't last.
Goldman Sachs posted its best-ever quarter for trading revenue thanks to April’s market volatility, but its stock still fell slightly. Morgan Stanley and Bank of America also beat expectations, yet their shares dropped as well.
"This is not because there is something nasty lurking deep in its earnings report," Brooks explains, "but instead because the share price is already higher by 20% YTD, and since April’s sell off, volatility has been subdued."
Brooks adds that markets are wary about sustained trading performance and the potential for tariffs to impact investment banking and consumer activity.
11:00am: A rare miss from BofA
Bank of America is the only major US bank to report a revenue miss so far this earnings season.
The bank posted a mixed earnings report for the second quarter, with profit ahead of expectations while revenue fell short.
Profit was up 3% year-over-year at $7.12 billion or $0.89 per share, ahead of the consensus of $0.86.
Revenue of $26.61 billion was short of the Wall Street consensus of $26.72 billion, driven by net interest income underperforming expectations.
10:40am: Goldman beats
Goldman Sachs Group Inc (NYSE:GS, ETR:GOS) shares dipped in early trade on Wednesday despite the investment banking firm reporting better-than-expected results for the second quarter.
The company posted a 15% year-over-year jump in revenue to $14.58 billion, more than $1 billion ahead of the consensus estimate of $13.51 billion.
This was driven by growth in equities trading revenue to $4.3 billion, up 36% from a year earlier and $650 million more than expected by analysts.
Earnings of $3.72 billion or $10.91 per share also topped estimates of $9.59.
Net interest income surged 56% to approximately $3.1 billion, above analysts' $2.79 billion consensus.
9.55am: Stocks start on the up
US stocks have opened higher, while the FTSE is remaining bid.
In New York, the Dow Jones is up 0.2% and the S&P 500 has added 0.1%, while the Nasdaq Composite is flat.
The small cap Russell 2000 is leading the gains, up 0.7%.
9:05am: Wholesale inflation stalls
US wholesale inflation was flat in June, defying expectations of a 0.2% rise, according to the Bureau of Labor Statistics.
Core producer prices rose 2.5% year-over-year, the smallest gain since late 2023.
Combined with recent consumer inflation data, the figures suggest that Trump-era tariffs have had little impact on overall prices so far, CNBC reported.
8:05am: Futures up
US stock futures on Wednesday were pointing to a reversal of the previous day's moves.
Dow Jones futures are up 0.2% and Nasdaq 100 futures are down 0.2%, with those for the S&P 500 just below flat.
Last night, US stocks were mixed too, with the Dow dropping 1% and the S&P slipping 0.4%, while the Nasdaq Composite rose 0.2% thanks to a strong rally for Nvidia and other chip giants.
After the previous day's consumer price inflation reading came in at 2.7%, at the upper end of analysts’ forecasts and a significant increase from the prior reading of 2.4%, today's chief item on the economic data calendar is the producer price index (PPI), giving a reading of how consumer prices will move in coming months.
"If PPI echoes yesterday’s numbers, it could reignite concerns that inflation remains too sticky for the Fed’s comfort, which could see the market’s rate cut expectations reduced further," says market analyst David Morrison at Trade Nation.
There are also speeches from several Federal Reserve members in the diary, along with the release of the Fed's Beige Book report.
Earnings season is still in first gear, with numbers from Goldman Sachs, Morgan Stanley, Bank of America and Johnson & Johnson.
This follows earnings from JPMorgan, Wells Fargo and Citigroup the day before where earnings were smashed, but "bad guidance along with compounding cost structures have left hope reeling", said Naeem Aslam at Zaye Capital Markets.
Big misses on earnings, margin or the outlook could "extend the pullback", he added.
Goldman’s report, as a key Dow component and barometer for the financials sector, will be key.