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The S&P 500 trimmed its losses on Wednesday after President Donald Trump said he wasn’t planning to fire Federal Reserve Chairman Jerome Powell, easing some investor anxiety. Stocks bounced slightly around midday, with the Dow up 81 points, the S&P 500 rising 0.1%, and the NASDAQ also gaining 0.1%.
Earlier, reports had circulated suggesting Trump was preparing to oust Powell. But in a statement to reporters, Trump denied any immediate action, though he didn’t hide his dissatisfaction with the Fed chief. He criticised Powell for keeping interest rates high and accused him of overseeing an unnecessarily expensive renovation of the Fed’s headquarters.
Meanwhile, inflation data released Wednesday showed U.S. wholesale prices were flat in June. The producer price index (PPI), which tracks prices businesses pay for goods and services, stayed unchanged from May and rose 2.3% over the past year, slower than the 2.7% rise in May. This suggests some relief in business costs despite rising prices for final goods, thanks in part to a drop in travel accommodation services.
That news came on the heels of consumer price data on Tuesday, which showed inflation for everyday shoppers is heating up. Consumer prices rose 2.7% in June year-over-year, beating expectations and reflecting the early effects of Trump’s tariffs, which are starting to ripple through supply chains.
Markets are also watching closely for the Federal Reserve’s Beige Book, a report that gives insight into the economy based on real-world feedback from businesses and experts. Analysts believe this report will highlight continued “stagflationary” pressures: slow growth but rising prices, largely due to ongoing trade tensions.
Adding to the uncertainty, Trump announced that several new tariffs are moving forward. That includes a 200% tariff on pharmaceutical imports, expected by the end of the month, and a new 19% tariff on goods from Indonesia. These moves come on top of tentative trade deals with the UK, China, and Vietnam, and ahead of a looming August 1 deadline when his broader “reciprocal” tariff plan is set to go into effect.
Earnings season also picked up pace on Wednesday. While major banks like JPMorgan, Citigroup, and Wells Fargo all beat expectations, executives warned of a murky economic outlook, especially due to rising trade tensions and fiscal concerns. Bank of America and Goldman Sachs posted solid quarters, thanks to strong trading and deal-making activity. Morgan Stanley also reported a profit increase, though its shares slipped.
In other company news, Johnson & Johnson raised its full-year sales forecast despite risks from upcoming tariffs, while Tesla stock jumped 3% on news that it would introduce a six-seater Model Y in the fall.
Crypto-related stocks also surged as two major crypto bills, the GENIUS Act and the CLARITY Act, moved closer to potential passage in the House after initially failing a vote on Tuesday. If approved, these bills could significantly boost the development and adoption of stablecoins and other digital assets.