Volkswacht Bodensee - US stocks rise, dollar slides as Trump eyes new Fed boss

Wall Street opened in the green after Trump suggested he was lining up Powell's replacement ahead of an expected departure next year.

The Dollar Index, which compares the greenback to a basket of major currencies, hit its lowest level since March 2022 at 96,997 points.

The pound meanwhile reached its highest level against the greenback since October 2021.

"Concerns over the Federal Reserve's independence and growing expectations for monetary easing weighed on the currency," said George Pavel, general manager at Naga.com Middle East, a trading platform.

"The move, if confirmed, would raise serious questions about the central bank's autonomy at a time of heightened policy uncertainty, painting a bearish scenario for the greenback," Pavel said.

Since returning to the White House, Trump has constantly hit out at Powell for not cutting US interest rates and questioned his intelligence, stoking worries about the bank's independence.

"I know within three or four people who I'm going to pick," Trump told reporters after a NATO summit.

The Wall Street Journal reported that Trump could announce a replacement as early as September, with Treasury Secretary Scott Bessent, economic adviser Kevin Hassett and former Fed governor Kevin Warsh among the contenders.

Earlier this week, Powell told lawmakers the bank would assess the impact of Trump's tariffs on the economy before making any rate move.

European and Asian stock markets diverged and oil prices were a lot steadier as Middle East tensions eased and focus turned back to US trade negotiations.

Shares in European defence companies rose after NATO countries on Wednesday agreed to ramp up military spending.

Rheinmetall jumped five percent in Frankfurt while France's Thales gained 2.8 percent and Britain's BAE systems added more than three percent in afternoon deals.

Asia's main stock market closed mixed.

"Easing tensions in the Middle East, the potential for rate cuts coming later this year, and stabilising oil prices are helping support a relatively positive outlook for equities," noted Matt Britzman, senior equity analyst at Hargreaves Lansdown.

Trade uncertainty resurfaced as most countries have yet to reach deals with Washington to avoid steep tariffs ahead of a July 9 deadline.

The shaky ceasefire between Iran and Israel still held Thursday and Trump said that he would hold nuclear talks with Tehran next week.

Oil prices extended a mild rebound after tumbling at the start of the week on the ceasefire announcement.

- Key figures at around 1335 GMT -

New York - Dow: UP 0.5 percent at 43,195.65 points

New York - S&P 500: UP 0.3 percent at 6,112.50

New York - Nasdaq Composite: UP 0.2 percent at 20,016.74

London - FTSE 100: UP 0.3 percent at 8,747.29

Paris - CAC 40: DOWN 0.1 percent at 7,551.98

Frankfurt - DAX: UP 0.4 percent at 23,595.58

Tokyo - Nikkei 225: UP 1.7 percent at 39,584.58 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 24,325.40 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,448.45 (close)

New York - Dow: DOWN 0.3 percent at 42,982.43 (close)

Euro/dollar: UP at $1.1711 from $1.1656 on Wednesday

Pound/dollar: UP at $1.3726 from $1.3664

Dollar/yen: DOWN at 144.35 yen from 145.32 yen

Euro/pound: UP at 85.30 pence from 85.26 pence

West Texas Intermediate: UP 0.8 percent at $65.50 per barrel

Brent North Sea Crude: UP 0.9 percent at $66.94 per barrel

I.Stoeckli--VB