Dow futures exhibit a lack of volatility following a tumultuous trading session characterized by significant fluctuations in equities, triggered by reports regarding President Donald Trump’s intentions to dismiss Federal Reserve Chair Jerome Powell. Trump subsequently refuted the speculation, yet he did not dismiss the possibility of removing Powell from his position. Meanwhile, a survey of U.S. businesses indicates an increase in economic activity; however, concerns persist regarding the uncertainty in the broader outlook driven by tariffs.
Dow futures contract and S&P 500 futures exhibited minimal movement, while Nasdaq 100 futures increased by 28 points, representing a rise of 0.1%. The primary indices experienced an increase following a tumultuous trading session on Thursday. Equities experienced a decline, the dollar saw a depreciation, and gold prices surged, in response to reports suggesting that President Trump was poised to dismiss Powell. Equities experienced a rally following Trump’s assertion that he had no intentions of removing the Fed Chair (more below). “For less than an hour yesterday, it appeared that Trump was on the verge of removing Powell,” analysts at ING noted in a communication to clients. “Following yesterday’s scare, markets have likely developed an increased resilience to headlines concerning this issue.”Supporting sentiment were unexpectedly stable month-on-month producer price figures for June, which alleviated some concerns sparked by a separate report earlier this week indicating an acceleration in consumer price increases.
The leader of the Federal Reserve has often found himself on the receiving end of President Trump’s trade-related criticism, as the president has expressed discontent with Powell’s reluctance to expedite interest rate cuts. Powell, largely due to the economic uncertainty arising from Trump’s tariffs, has recently adopted a wait-and-see stance regarding future policy adjustments. On Wednesday, Trump stated that although he does not intend to dismiss Powell and refuted a report suggesting otherwise, he has not excluded the potential for an ouster. He expressed that it was “highly unlikely” Powell would face dismissal over fraud, citing Republican concerns regarding the increased expenses associated with the Fed’s $2.5 billion renovation of its Washington headquarters. The Federal Reserve has justified its management of the initiative. In a subsequent interview, Trump expressed a desire for Powell to resign, while acknowledging that the decision ultimately rests with the Fed Chair. Powell, appointed by Trump in 2017, has indicated his intention to fulfill the remainder of his term, concluding in May 2026.
U.S. economic activity experienced an uptick in June and early July; however, the forecast is overshadowed by the possible repercussions of Trump’s assertive tariff strategy, as indicated by the Federal Reserve’s “Beige Book.” The report consolidates feedback from American businesses and seeks to present a snapshot of the economic landscape. It indicated that, although activity has picked up in recent weeks, companies remain “neutral to slightly pessimistic” regarding the broader outlook. “Contacts in a wide range of industries anticipated that cost pressures would persist at elevated levels in the forthcoming months, thereby heightening the probability that consumer prices will begin to increase more swiftly by late summer,” the Beige Book stated. The survey encompassed remarks, discussions, and observations gathered from both commercial and community contacts associated with each of the Federal Reserve’s 12 regional branches. All of the districts reported observing the impact of the tariffs, primarily manifested as price increases by firms. However, some companies indicated that they were experiencing advantages from the increased reshoring of overseas operations.
A series of U.S. company reports is scheduled for release on Thursday, with particular emphasis on the figures from Netflix following the market’s close. Analysts at Vital Knowledge project that the group will deliver robust results as its dominance in the streaming sector continues to grow, although there are concerns that the short-term expectations surrounding Netflix could be overly optimistic. Elsewhere on the docket, GE Aerospace, Pepsico, Elevance Health, and Cintas Corporation are among the names set to post their latest returns prior to the opening bell on Wall Street. Analysts at Vital Knowledge indicated that a series of positive earnings reports and guidance in recent days has contributed to a sense of optimism for equities.
Taiwan Semiconductor Manufacturing Co clocked record profit in the second quarter on Thursday, beating market expectations, as the world’s biggest contract chipmaker was bolstered by ever-more robust artificial intelligence demand. CEO C.C. Wei indicated that he perceives limited prospects for a deceleration in AI-driven demand in the forthcoming months. However, Wei expressed some caution regarding the fourth quarter of 2025, citing uncertainty surrounding the effects of trade tariffs. TSMC’s net income increased by 60.7% to T$398.27 billion in the three months ending June 30, amounting to $13.52 billion. The outcome exceeded Reuters’ expectations of T$377.4 billion, resulting in earnings per share of T$15.36. The company reported a 38.6% increase in revenue, reaching T$933.79 billion, according to a statement. The robust returns were primarily propelled by AI-driven demand for TSMC’s 3 nanometer and 5nm wafer technology, which serves as a crucial element in advanced AI processors. This mitigated the impact of a reduced revenue contribution from smartphone and device chip sales, alongside challenges posed by foreign exchange fluctuations.