US stocks end higher, shrugging off Powell firing fears
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Traders working on the floor of the New York Stock Exchange at the opening bell on July 16.
PHOTO: EPA
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- Wall Street closed higher after recovering from a dip caused by dismissal rumours of Fed chair Jerome Powell. Mr Trump stated firing Powell was "highly unlikely".
- The producer price index was unchanged, beating expectations, while the Fed's Beige Book noted tariff impacts. Many firms passed costs to consumers.
- Goldman Sachs rose after strong earnings and dealmaking optimism. Ford fell due to fuel injector costs, while Johnson & Johnson surged with raised forecasts.
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NEW YORK - Wall Street stocks finished higher on July 16, shrugging off a mid-session swoon after US President Donald Trump denied plans to fire Federal Reserve chair Jerome Powell.
Major indices had moved suddenly negative following reports that a dismissal could be imminent. But they recovered quickly once Mr Trump ruled out firing Mr Powell, for now.
Mr Trump, who has bitterly attacked the Fed chair for months, said such a move was “highly unlikely” and that “I’m not talking about that” when asked if he would fire Mr Powell.
The tech-rich Nasdaq Composite Index advanced 0.3 per cent to 20,730.49, a third straight closing record.
The Dow Jones Industrial Average gained 0.5 per cent to 44,254.78, while the broad-based S&P 500 advanced 0.3 per cent to 6,263.70.
“It’s very clear that the market wants to go higher,” said Mr Adam Sarhan, of 50 Park Investments, who described investor reaction to Mr Trump’s mixed messaging on Mr Powell as typical of a bullish tilt.
“Every time we get bad news thrown at it, the market shrugs it off and continues to rally, including today,” Mr Sarhan said.
Otherwise, markets absorbed a generally benign wholesale inflation report. The producer price index was unchanged on a month-on-month basis, beating analysts’ expectations and cooling from a 0.3 per cent rise in May.
The Fed’s “Beige Book” survey of economic conditions, however, pointed to growing impacts from Mr Trump’s myriad tariffs.
Many firms said they passed along “at least a portion of cost increases” to consumers due to tariffs, while also expressing expectations that costs will remain elevated.
Among individual companies, Goldman Sachs jumped 0.8 per cent after quarterly earnings easily topped analyst estimates. Chief executive officer David Solomon predicted an uptick in dealmaking, pointing to greater “confidence level on the part of CEOs, that significant scaled industry consolidation is possible.”
Ford slumped 2.9 per cent after disclosing that it would account for US$570 million (S$730 million) in costs connected to fuel injectors in several models from recent years, including Bronco Sport vehicles from 2021 to 2024.
But Johnson & Johnson surged 6.2 per cent as it lifted its full-year forecast after quarterly earnings topped estimates. Analysts noted that the health care company also lowered its estimate for the cost hit from tariffs. AFP
