Volkswacht Bodensee - US stocks finish higher as markets gyrate on Powell firing fears

Major equity indices had moved suddenly negative following reports that a dismissal could be imminent, but they recovered quickly once Trump ruled out firing Powell -- for now.

Trump, who has bitterly attacked the Fed chair for months, said such a move was "highly unlikely" and that "I'm not talking about that" when asked if he would fire Powell.

All three major US indices finished the rollercoaster day higher, with the tech-focused Nasdaq ending at a third straight record.

"It's very clear that the market wants to go higher," said Adam Sarhan of 50 Park Investments, who described investor reaction to Trump's mixed messaging on Powell as typical of a bullish tilt.

"Every time we get bad news thrown at it, the market shrugs it off and continues to rally, including today," Sarhan said.

The Powell drama also jolted the Treasury and currency markets. The dollar retreated against the euro and other major currencies, although it recovered some of its losses after Trump denied he would fire Powell.

Besides the Fed drama, markets have also weighed Trump's myriad tariff actions amid worries about inflation. The US president has vowed numerous tariff increases on August 1 if trading partners fail to secure deals.

After the June consumer price index showed increased pricing pressure following US tariffs on Tuesday, the producer price index was unchanged on a month-on-month basis, cooling from growing 0.3 percent in May.

But the Fed's "Beige Book" survey of economic conditions, however, pointed to increasing impacts from Trump's various tariffs.

Many firms said they passed along "at least a portion of cost increases" to consumers due to tariffs, while also expressing expectations that costs will remain elevated.

Among individual companies, Goldman Sachs jumped 0.9 percent after quarterly earnings easily topped analyst estimates. CEO David Solomon predicted an uptick in dealmaking, pointing to greater "confidence level on the part of CEOs, that significant scaled industry consolidation is possible."

Ford slumped 2.9 percent after disclosing that it would account for $570 million in costs connected to fuel injectors in several models from recent years, including Bronco Sport vehicles from 2021 to 2024.

But Johnson & Johnson surged 6.2 percent as it lifted its full-year forecast after quarterly earnings topped estimates. Analysts noted that the health care company also lowered its estimate for the cost hit from tariffs.

- Key figures at around 2150 GMT -

New York - Dow: UP 0.5 percent at 44,254.78 (close)

New York - S&P 500: UP 0.3 percent at 6,263.70 (close)

New York - Nasdaq Composite: UP 0.3 percent at 20,730.49 (close)

London - FTSE 100: DOWN 0.1 percent at 8,926.55 points (close)

Paris - CAC 40: DOWN 0.6 percent at 7,722.09 (close)

Frankfurt - DAX: DOWN 0.2 percent at 24,009.38 (close)

Tokyo - Nikkei 225: FLAT at 39,663.40 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 24,517.76 (close)

Shanghai - Composite: FLAT at 3,503.78 (close)

Euro/dollar: UP at $1.1641 from $1.1601 on Tuesday

Pound/dollar: UP at $1.3414 from $1.3384

Dollar/yen: DOWN at 147.80 yen from 148.88 yen

Euro/pound: UP at 86.72 pence from 86.68 pence

West Texas Intermediate: DOWN 0.2 percent at $66.38 per barrel

Brent North Sea Crude: DOWN 0.3 percent at $68.52 per barrel

burs-jmb/jgc

S.Leonhard--VB