S&P 500 Closes Higher as Trump Denies Firing Fed Chair Powell, Tariff Risks Remain
đź“Ś Key Takeaways
- S&P 500 closes higher amidst news that Trump denies firing Fed Chair Powell, but expresses frustration.
- S&P 500 gains 0.3%, NASDAQ closes at new record
- Wholesale inflation flat in June, annual PPI slows to 2.3%
- 200% pharmaceutical tariffs set to take effect by month-end
- Earnings season picks up, with mixed reactions from major banks
- Tesla, Johnson & Johnson, Goldman Sachs among top gainers
📉 Trump Quells Fed Speculation, Markets Breathe a Sigh of Relief
On Wednesday, U.S. stocks closed higher after President Donald Trump denied rumors that he would imminently fire Federal Reserve Chair Jerome Powell.
Speaking to reporters, Trump said he was “not planning anything” regarding Powell but did criticize him for maintaining high interest rates and mishandling the Fed headquarters’ renovation budget.
The S&P 500 rose 0.3%, and the NASDAQ closed at a record 20,730.49, while the Dow added 231 points (0.5%). The reassurance from Trump helped calm investor concerns about policy instability at the Federal Reserve.
đź’Ľ Wholesale Inflation Holds Steady, Consumer Prices Tick Higher
In economic news, the Producer Price Index (PPI) remained unchanged in June, following a 0.3% increase in May, according to the Labor Department. The annual rate slowed to 2.3%, below expectations of 2.5%.
This cooling in wholesale prices contrasts with Tuesday’s CPI report, which showed consumer inflation rising to 2.7%, suggesting that retail-level inflation may be picking up due to recent tariffs.
| Indicator | May 2025 | June 2025 | Forecast |
|---|---|---|---|
| PPI (Monthly) | +0.3% | 0.0% | +0.2% |
| PPI (Annual) | +2.7% | +2.3% | +2.5% |
| CPI (Annual) | +2.4% | +2.7% | +2.6% |
đź“• Beige Book, Stagflation Concerns Loom
The Federal Reserve’s Beige Book, due soon, is expected to provide insight into regional economic conditions, including business confidence and price pressures. Analysts suggest it may reflect stagflationary trends—slowing growth alongside rising prices, mainly due to ongoing trade tensions.
Trump’s Tariff Plans Add to Uncertainty
Markets remain on edge over Trump’s escalating trade war. He confirmed that his proposed 200% tariffs on pharmaceutical imports will be enforced by month-end, alongside other levies.
The U.S. will also impose a 19% tariff on Indonesian goods, part of a new trade agreement. These moves come as the White House reaches framework deals with the UK, China, and Vietnam, with more expected soon.
📆 The August 1 deadline for all proposed “reciprocal” tariffs is approaching, and the administration has refused to extend it again.
Read More: Trump Demands Jerome Powell’s Immediate Resignation!
Earnings Season Heats Up: Banks, Pharma, and Tech in Focus
Earnings results were mixed:
- JPMorgan, Citigroup, and Wells Fargo beat expectations but expressed economic caution
- Goldman Sachs saw record equity trading revenues; stock rose
- Morgan Stanley slipped despite solid Q2 profit
- Johnson & Johnson raised its sales forecast, stock climbed
- Tesla rose 3% on news of a six-seater Model Y launch this fall
- Global Payments Inc surged 5% after Elliot Management took a stake
đź’¬ Final Thoughts
Markets got a boost from Trump’s denial of Powell’s firing, but the underlying pressures from inflation and tariffs remain strong.
Investors now await the Fed’s Beige Book and further earnings reports for direction. With tariff deadlines closing in and inflation showing mixed signals, the rest of July may be volatile.
📢 How are you preparing for the next round of tariffs? Share your thoughts in the comments below!
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