Dow, S&P 500, Nasdaq Up; Trump-Powell; Nvidia, ASML, More Movers; PPI Report

Things weren’t as rosy earlier in the session. All three major indexes took a sharp dive lower a little before noon. Bonds also sold off and the dollar tumbled about a percent after media reports said the president was likely to fire the Fed chair soon. Trump later said it was ‘highly unlikely,’ although he wouldn’t rule it out.

The market’s pullback–and reversal following Trump’s statements–reflected how deeply reliant the market is on Trump’s comments.

The reaction in the Treasury market was more troubling. A sharp rise in the 30-year above 5% suggests that investors, scared about the Fed losing its political independence, quickly rushed to demand more return from U.S. assets. Yields typically move more slowly.

“It is another incredibly whippy session on dozens of Fed related headlines,” Mizuho’s Daniel O’Regan wrote in a note to clients.

Trump has criticized Powell for keeping interest rates steady, and has also disparaged the $2.5 billion renovation of the Fed’s headquarters.

Powell’s term expires in May 2026.

“An easier solution (and one that wouldn’t involve the courts) would be to announce the President’s choice to replace Powell and afford the nominee the opportunity to publicly outline the initial gameplan when taking the helm of the FOMC next year,” wrote BMO Capital Market’s rate strategist Ian Lyngen.