Zacks Equity Research
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Wall Street made a chaotic start on Wednesday, with stocks going on a wild ride after reports suggested that President Donald Trump was set to fire Federal Reserve Chairman Jerome Powell, but finally ended in the green after Trump denied the reports. All three major indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.5% or 231.49 points, to end at 44,254.78 points.
The S&P 500 gained 0.3%, or 19.94 points, to finish at 6,263.70 points. Real estate and healthcare stocks were the biggest gainers.
The Real Estate Select Sector SPDR (XLRE) gained 1.1%, while the Health Care Select Sector SPDR (XLV) rose 1.2%. The Technology Select Sector SPDR (XLK) added 0.3%. Ten of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.3%, or 52.69 points, to close at 20,730.49 points, posting a new all-time closing high.
The fear-gauge CBOE Volatility Index (VIX) was up 1.27% to 17.16.
Wall Street saw a volatile first hour of trading on Wednesday after a White House spokesperson and news reports indicated that Trump was gearing up to fire Powell. However, Trump later denied the reports, saying that it is “highly unlikely” that he will fire Powell anytime soon.
“No, we’re not planning on doing it,” Trump said. However, he added that he does not “rule out anything. Powell’s term is set to end next May but Trump has been extremely critical of the Federal Reserve Chairman. The President has been calling for Powell’s resignation for delaying interest rate cuts, which he claims is costing the economy billions of dollars.
Powell and most of the Federal Reserve officials have maintained a hawkish stance and said that they are in no rush to cut interest rates, as they would wait and watch how Trump’s tariffs would impact the economy, as higher tariffs are likely to push inflation up.
Although Trump denied plans to fire Powell, investors remained concerned about the state of the economy. Fresh data released on Tuesday showed that the consumer price index (CPI) rose in June from May levels, which was primarily due to the new tariffs.
On Wednesday, a separate report showed that the producer price index (PPI), the Fed’s preferred inflation gauge, remained unchanged in June. This was because the lower service prices balanced the tariff-driven goods costs.
The earnings season kicked off this week. On Wednesday, a fresh batch of banks reported their quarterly results. Shares of Bank of America Corporation (BAC) declined 0.3% despite beating on earnings. Bank of America Corporation reported second-quarter 2025 earnings of $0.89 per share, beating the Zacks Consensus Estimate of $0.86 per share. Bank of America has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
