Volatility surged across interest rate-sensitive assets Wednesday after reports circulated that President Donald Trump may be preparing to remove Federal Reserve Chair Jerome Powell from his post. The rumors sparked fears over the Fed's independence, triggering a broad flight to gold and a sell-off in the U.S. dollar.
While Wall Street was mostly flat during midday trading in New York, traders were on edge, digesting the potential implications of a leadership shake-up at the central bank. Speculators are already positioning for a more dovish monetary path, anticipating that Powell’s possible ouster could accelerate future interest rate cuts.
Gold prices jumped sharply, soaring from $3,325 to over $3,377 per ounce within minutes before paring gains to around $3,350.
Bitcoin (CRYPTO: BTC) rallied 1.2% to $119,000, benefiting from dollar weakness and renewed demand for decentralized assets.
The U.S. dollar index fell 0.3%, on track to snap a four-day winning streak. At the same time, Treasury yields edged slightly lower as bond traders priced in increased political and monetary policy uncertainty.
Economic data released Wednesday added fuel to the rate-cut narrative. The Producer Price Index was flat in June, down from a 0.3% gain in May and below the 0.2% consensus forecast. On a year-over-year basis, producer prices rose 2.3%, the slowest pace since September 2024 and softer than the 2.5% economists had expected.
Core PPI, which excludes volatile food and energy prices, was also unchanged in June. The annual rate dropped to 2.6% from a revised 3.2% in May, falling short of the 2.7% consensus.
Wednesday’s Performance In Major U.S. Indices, ETFs
| Major Indices | Price | Chg % |
| Russell 2000 | 2,212.86 | +0.4% |
| Dow Jones | 44,089.92 | +0.2% |
| S&P 500 | 6,246.61 | +0.0% |
| Nasdaq 100 | 22,845.74 | -0.2% |
According to Benzinga Pro data:
- The Vanguard S&P 500 ETF (NYSE:VOO) flattened at $571.60.
- The SPDR Dow Jones Industrial Average (NYSE:DIA) inched 0.1% up to $440.42.
- The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) dropped 0.3% to $555.24.
- The iShares Russell 2000 ETF (NYSE:IWM) rose 0.2% to $219.37.
- The Health Care Select Sector SPDR Fund (NYSE:XLV) outperformed, up 1%; the Materials Select Sector SPDR Fund (NYSE:XLB) lagged, down 0.8%.
Wednesday’s Stock Movers
- Shares of major banks were mixed despite beating earnings expectations, with Goldman Sachs Group Inc. (NYSE:GS) finishing flat, Bank of America Corp. (NYSE:BAC) slipping 1.4% and Morgan Stanley (NYSE:MS) falling 2.8%.
- Other stocks reacting to earnings report included Progressive Corp. (NYSE:PGR) up 1.55%, Johnson & Johnson (NYSE:JNJ) up 6.7%, Prologis Inc. (NYSE:PLD) up 1.9% and Kinder Morgan Inc. (NYSE:KMI) up 0.4%.
- Unity Software Inc. (NYSE:U) surged 13% after Jefferies raised its price target to $35 from $29.
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