Stock Markets React to Trump’s Remarks on Firing Fed Chair Powell
US President Donald Trump sent the US stock market on a jagged round trip after saying he had ‘talked about the concept of firing’ the head of the Federal Reserve, led by Chair Jerome Powell. The S&P 500 added 0.3% after whipping through an earlier drop and subsequent recovery, while the Dow Jones Industrial Average rose 0.5%, and the Nasdaq composite gained 0.3%.
Trump’s remarks sparked a sharp sell-off in the morning, with the S&P 500 falling as much as 0.7% before recovering as the President clarified that he is unlikely to fire Powell. The Fed has two main jobs: keeping the job market strong while keeping inflation under control. Lowering interest rates would help boost the economy but would also give inflation more fuel when tariffs may be set to push prices for U.S. households higher.
The Fed has been criticized by Trump for not cutting interest rates this year, a move that would have made it easier for U.S. households and businesses to get loans to buy houses, build factories and otherwise boost the economy. Powell, meanwhile, has been insisting that he wants to wait for more data about how Trump’s stiff proposed tariffs will affect the economy and inflation before the Fed makes its next move.
Impact on Indian Markets
The Indian stock market, which has been influenced by global cues, reacted to the news with a mixed bag of performances. The Nifty 50 index closed flat, while the Sensex fell 0.2%. The market was also impacted by the Q1 results of major companies, with some stocks rising sharply and others declining.
Johnson & Johnson, the drug and medical device giant, jumped 5.9% after the company beat analysts’ sales and profit targets and raised its full-year forecasts for both. PNC Financial Services Group added 1% following its better-than-expected quarterly report, thanks in part to loan growth despite what CEO Bill Demchak called ‘an uncertain macro environment.’
Global Markets
Stocks in Europe and Asia were mixed, with the European Central Bank’s decision to keep interest rates unchanged helping to boost sentiment. The yield on the 10-year U.S. Treasury fell to 4.46% from 4.50% late Tuesday, while the dollar was little changed against major currencies.
Conclusion
The news from the US has sent shockwaves through global financial markets, with investors waiting with bated breath for the next move from the Federal Reserve. The Indian market, which has been influenced by global cues, will continue to watch the developments closely and react accordingly.
