Wall Street benchmarks ended modestly higher on Wednesday, with the Nasdaq Composite posting its latest record finish, despite a chaotic half hour when news reports suggested the U.S. President was set to fire Federal Reserve Chair Jerome Powell. Shortly before midday, the main U.S. stock indexes fell sharply, the dollar plunged and Treasury yields rose after Bloomberg News reported the possibility of replacing Powell, citing an unidentified White House official.
According to preliminary data, the S&P 500 .SPX gained 19.65 points, or 0.31%, to end at 6,263.41 points, while the Nasdaq Composite .IXIC gained 51.82 points, or 0.25%, to 20,729.62. The Dow Jones Industrial Average .DJI rose 220.61 points, or 0.50%, to 44,243.90. It was the fifth session in six that the technology-heavy Nasdaq index has posted a record close. Since the President’s April tariff announcement, which initially sent U.S. equities into a spin, U.S. stock markets have been on a tear. The S&P 500 most recently posted a record finish last week.
The CBOE Volatility Index .VIX , Wall Street’s “fear gauge,” hit a more than three-week high in the wake of the initial Powell reports, but eased from those levels. Despite the President’s demands for easier credit, Fed officials have resisted cutting rates until there is clarity on whether his tariffs on U.S. trading partners reignite inflation. The chance of a rate cut in September was viewed around 56% earlier in the day, according to CME Fed Watch.
On Wednesday, the second day of this earnings season, another round of stronger profits from Wall Street’s big banks failed to ignite their own stock prices. Goldman Sachs GS.N inched higher after a 22% earnings surge. Both Bank of America BAC.N and Morgan Stanley MS.N joined the trend of higher profits fueled by trading desks navigating market turbulence in the second quarter. Their shares both declined though.
Johnson & Johnson JNJ.N soared, and was one of the best performers on the S&P 500, after halving its expectations for costs this year related to new tariffs and raising its full-year sales and profit forecast. Semiconductor stocks were sluggish after news that Nvidia NVDA.O would be allowed to sell its H2O chips in China had fueled gains in the previous session. The semiconductor index .SOX slipped from the 12-month high recorded on Tuesday.
Reporting by Sruthi Shankar, Pranav Kashyap and Nikhil Sharma in Bengaluru and David French and Suzanne McGee in New York; additional reporting by Medha Singh; Editing by Saumyadeb Chakrabarty, Maju Samuel and Richard Chang.
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