On Wednesday, major U.S. stock indices closed higher: the S&P 500 Index rose by 0.29%, the Dow Jones Industrials Index by 0.47%, and the Nasdaq 100 Index by 0.12%. September E-mini S&P futures increased by 0.33%, while September E-mini Nasdaq futures climbed 0.11%. This market uptick occurred after President Trump clarified that he does not plan to fire Fed Chair Powell but left the door open for termination “for cause.” Midday trading had seen a brief dip when Trump suggested he wanted Powell fired.
A positive PPI report for June, showing unchanged month-over-month data and a year-over-year increase of 2.3%, fueled market optimism, as it indicated that inflation pressures have not yet significantly affected producer prices. Additionally, the Beige Book report indicated slight economic improvement, with U.S. industrial production rising by 0.3% in June, surpassing expectations. Expectations for a -25 basis point rate cut by the Fed at the July 29-30 meeting are currently pegged at 3% and 58% for the September meeting.
Bitcoin rallied by 2.3% on Wednesday, recovering part of a previous decline, driven by support from House Republican talks on stablecoin legislation. In broader economic context, President Trump intends to send a tariff letter to over 150 countries, while existing tariffs on EU and Mexican imports are set to increase to 30%. Market watchers are anticipating further trade-related developments, including the release of upcoming economic data such as retail sales and unemployment claims.
