Markets opened calmly Thursday after President Donald Trump walked back earlier threats to fire Federal Reserve Chair Jerome Powell.
Ahead of the opening bell:
- S&P 500 futures were flat,
- Dow Jones futures dipped 0.2%,
- Nasdaq futures edged up less than 0.1%.
Trump vs. Powell
Trump has repeatedly criticized Powell for keeping interest rates steady despite low unemployment and a generally healthy economy. His latest complaint targets a $2.5 billion renovation of the Federal Reserve’s Washington headquarters, which Trump claims could justify Powell’s removal.
Markets briefly fell Wednesday following reports that Trump was considering firing Powell, but quickly rebounded after the president appeared to soften his stance. Wall Street tends to favor lower interest rates, which boost stock prices, and Trump has been vocal about wanting the Fed to cut rates more aggressively.
Strong Earnings Temper Trade Worries
The early part of earnings season has shown strong corporate results, even as companies warn about uncertainty stemming from Trump’s tariff policies.
- PepsiCo shares rose 2% in premarket trading after beating second-quarter estimates. The company reaffirmed earlier guidance, citing weaker full-year profit expectations due to tariffs and slowing consumer spending.
- Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s top chipmaker and key Nvidia supplier, saw a 3.4% jump in early trading after reporting strong year-over-year gains. Still, TSMC warned of “uncertainties and risks” from ongoing trade tensions.
Some companies, however, didn’t fare as well:
- United Airlines fell 1.6% overnight after its revenue slightly missed expectations and it trimmed full-year profit forecasts.
- Ingredion plunged nearly 6%, and Archer-Daniels-Midland dropped 3%, after Trump claimed Coca-Cola would switch to using real cane sugar in the U.S.—a statement the company hasn’t confirmed. Both firms are major suppliers of high fructose corn syrup.
Netflix is set to report earnings after markets close. Meanwhile, new data on jobs and retail sales is due Thursday morning.
Global Markets
Europe:
- Germany’s DAX rose 0.8%
- France’s CAC 40 gained 0.9%
- Britain’s FTSE 100 added 0.4%
Asia:
- Japan’s Nikkei 225 climbed 0.6% despite a trade deficit blamed on reduced U.S. exports due to tariffs
- Shanghai Composite gained 0.4%
- Australia’s ASX 200 rose 0.9%
- South Korea’s Kospi edged up 0.2%
- India’s Sensex slipped 0.3%
- Thailand’s SET surged 3.3% on strong showings from Airports of Thailand and Delta Electronics
- Hong Kong’s Hang Seng closed down 0.1% after giving up early gains
Commodities & Currency
- U.S. crude oil rose $0.30 to $66.68 per barrel
- Brent crude inched up $0.06 to $68.58 per barrel
- U.S. dollar strengthened to 148.73 yen from 147.89
- Euro dipped to $1.1579 from $1.1641
