Markets unsettled amid reports of potential Fed Chair Powell dismissal by President Trump

US stocks fluctuated on Wednesday as investors digested fresh economic data, tariff-related concerns and conflicting reports about the possible removal of Federal Reserve Chair Jerome Powell by President Donald Trump. The S&P 500 edged up 0.15%, the Dow Jones rose by 113 points and the Nasdaq 100 inched higher by 0.05%. Markets initially dipped on rumours that the White House might seek to oust Powell, but sentiment improved after President Trump indicated such an outcome was unlikely. In company news, Bank of America fell by 1.50% following revenue figures that missed expectations. Goldman Sachs ended the day flat despite a sharp rise in profits, while Morgan Stanley dropped 3% even after posting stronger-than-expected second-quarter results. On the upside, Johnson & Johnson surged 6% after beating earnings estimates and upgrading its full-year outlook.

European stocks closed lower for a third consecutive session, as persistent concerns over US tariffs continued to weigh on corporate sentiment and investor confidence. The UK’s FTSE 100 dropped by 0.13%, while DAX attempted a brief recovery but closed 0.2% lower. The STOXX 50 fell by 0.80% and the broader STOXX 600 slipped 0.50%. Semiconductor giant ASML slumped 11.40% after warning of limited growth potential in 2026 due to economic and geopolitical headwinds, including the risk of US tariffs on new systems and parts. This came despite the company beating second-quarter earnings and revenue expectations. Renault tumbled 18.50% after cutting its margin forecast for the year, dragging other auto stocks lower, with Stellantis down 6.50% due to its significant exposure to the French car market. Trade tensions remained in sharp focus after President Trump suggested he could impose tariffs on pharmaceuticals by the end of the month, with semiconductors also under consideration. 

Asian markets closed mixed as investors remained cautious amid renewed tariff worries and ongoing inflation pressures. The Nikkei 225 slipped by 0.04%, while Chinese stocks were subdued, with the Shanghai Composite edging down 0.05% as traders weighed the potential impact of US tariffs and signs of slowing domestic demand. Hong Kong’s Hang Seng Index fell by 0.25%.

South African markets showed resilience as gains in several sectors offset slight declines in the broader index, with the ALSI closing at 97 064.25 points, up a modest 0.05% from the previous session. The JSE Top 40 Index dipped marginally by 0.01%, while the JSE Industrial 25 rose 0.18% and the Financial 15 gained 0.97%. Meanwhile, the rand strengthened by 0.50%, trading at 17.81 against the dollar at 19h54 SAST.

WTI crude oil futures declined to $66 a barrel, marking a third straight day of losses. The drop was driven by growing concerns over a potential supply glut and the dampening effect of US trade tariffs on global growth and fuel demand. Caution remains high among traders as OPEC+ accelerates the return of previously curbed output, while production continues to rise across the Americas. Simultaneously, signs of weakening global demand are becoming more apparent, with fears mounting that President Trump’s escalating tariffs could further hinder economic activity and energy consumption. Brent crude slipped 0.36% to $68.46 a barrel, while gold edged up 0.42% to trade at $3 355.02 an ounce.