Closing Recap 

U.S. stocks finished higher after a dramatic intraday reversal, as President Trump walked back reports that he planned to fire Fed Chair Powell, calming market fears; gold gained, the dollar reversed to finish lower, and Treasury yields were mixed after a volatile session. 

Key Takeaways 

• Stocks Rebound on Powell News: Major indices erased significant morning losses to close broadly higher after President Trump denied he was planning to oust Fed Chair Powell. 
• Fed Independence Fears Spark Volatility: Markets initially sold off on news reports that Trump was likely to fire Powell soon, sending the dollar tumbling and sparking a flight to safety in bonds and gold. 
• Cooler PPI Data: June Producer Price Index (PPI) came in cooler than expected (headline and core both unchanged m/m), adding to signs of moderating inflation. 
• Gold Rises, Oil Eases: Gold prices climbed on safe-haven demand and a weaker dollar. Oil prices slipped despite a large U.S. crude inventory draw.
• Dollar Reverses Sharply: The U.S. dollar index experienced extreme volatility, first rising on the Powell news, then plunging to end a 9-day winning streak after Trump’s denial. 
• Treasury Yields Mixed: Short-term Treasury yields fell on rate cut hopes, while longer-dated yields rose amid concerns about Fed independence, resulting in a steeper yield curve.
• Bank Earnings Mixed: Major banks reported mixed results, adding to sector-specific choppiness. 

Market Overview 

U.S. equity markets experienced a day of extreme volatility, driven almost entirely by dramatic headlines out of Washington concerning the leadership of the Federal Reserve. Stocks sold off sharply this morning, with the S&P 500 declining as much as 0.7%, following multiple news reports that President Trump was likely to fire Fed Chairman Jerome Powell soon and had discussed the possibility with Republican lawmakers. This news rattled investors, raising significant concerns about the central bank’s independence and adding a major new layer of uncertainty to an already complex market environment. The initial reaction saw a flight to safety, with the dollar weakening, gold rallying, and Treasuries seeing whippy price action. 

Index	Up/Down	% Change	Last
DJ Industrials	231.49	0.0053	44254
S&P 500	19.94	0.0032	6263
Nasdaq	52.69	0.0026	20730
Russell 2000	22	0.01	2227

However, the market bottomed and executed a powerful reversal around 11:30 AM ET after President Trump publicly denied the reports. While not ruling anything out, Trump told reporters, “we’re not planning on doing anything,” and that firing Powell was “highly unlikely.” These comments were enough to quell the market’s immediate fears, triggering a strong rebound that carried stocks to a positive close, with indices finishing near the highs of the day. 

Prior to the Powell drama, markets digested a cooler-than-expected June Producer Price Index (PPI) report, which showed moderating wholesale inflation. Bank earnings were mixed, and cautious 2026 growth commentary from chip equipment maker ASML weighed on semiconductors. Despite the intraday chaos, the market’s ability to bounce back underscores a persistent “buy the dip” mentality, though the day’s events highlight the significant headline risk currently facing investors.

Economic Data

The economic data released yesterday was generally supportive of a potential Fed easing narrative, with moderating producer prices and strong industrial production. 

• Producer Price Index (PPI) (June): Headline PPI M/M: Unchanged (Below +0.2% consensus, vs. +0.1% prior). 
• Headline PPI Y/Y: +2.3% (Below +2.5% consensus). 
• Core PPI M/M (Ex-Food & Energy): Unchanged (Below +0.2% consensus). 
• Core PPI Y/Y (Ex-Food & Energy): +2.6% (Below +2.7% consensus). 
• Industrial Production (June): Rose +0.3% (Above +0.1% consensus). Capacity Utilization rose to 77.6% (Above 77.4% consensus). 
• Fed Beige Book: Showed economic activity increased slightly from late May. Outlook was neutral to slightly pessimistic. Prices increased, with seven districts characterizing growth as moderate and five as modest. 

Commodities, Currencies, and Treasuries 

Gold prices rallied, with August futures gaining $22.40 (+0.68%) to settle at $3,359.10 per ounce. The metal benefited from the flight to safety during the morning’s Fed independence scare and a subsequent sharp reversal lower in the U.S. dollar. Crude oil prices finished modestly lower, with WTI settling down $0.14 (-0.21%) at $66.38/bbl. Prices were volatile, weighing signs of stronger Chinese consumption against ongoing concerns about the impact of U.S. tariffs and a surprise build in U.S. fuel inventories. The currency and Treasury markets were the epicenter of today’s volatility. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.14	USD/bbl	66.38
Brent	-0.19	USD/bbl	68.52
Gold	22.4	USD/oz	3359.1
EUR/USD	0.0025	USD	1.1624
USD/JPY	-0.9	JPY	147.96
10-Year Note	-0.035	%	0.04454

The U.S. dollar index (DXY) plunged after Trump’s denial, ending a nine-day winning streak, with the Euro and Yen bouncing strongly. Treasury yields were mixed; short-term yields like the 2-year fell over 7 basis points on the turmoil, reflecting rate cut hopes, while the 30-year bond yield rose nearly 5 basis points, perhaps on concerns about U.S. institutional stability.

Looking Ahead 

The market will continue to digest the implications of the day’s dramatic events surrounding the Federal Reserve. Any further comments from the White House or Fed officials will be scrutinized. Today brings weekly jobless claims and Q1 GDP revisions. The focus remains on signs of economic health and inflation trends, which will ultimately guide Fed policy. While the market showed resilience today, the episode highlights the significant headline risk posed by potential political interference with the central bank.