Stock markets surge following the selection of Trump's temporary Fed pick, igniting optimism for monetary policies that may be less restrictive.
The financial markets experienced a mix of gains and losses this week, with the S&P 500 posting 11 new 52-week highs and two new lows. The Dow Jones Industrial Average and the Nasdaq Composite also showed modest gains, with the S&P 500 rising by 17.22 points and the Nasdaq Composite advancing by 44.83 points on Friday.
Gilead Sciences saw a significant jump of 8.9% due to raising its full-year financial outlook. On the other hand, The Trade Desk sank 38% due to a sharp slowdown in second-quarter revenue growth, and Pinterest tumbled 11.5% due to missing analysts' estimates for second-quarter profit. The healthcare sector is lagging due to Eli Lilly's 14.1% drop following a late-stage study result. However, Expedia leapt 9.7% due to raising its annual forecast for gross bookings and revenue growth, and Monster Beverage gained 9% due to beating estimates for its second-quarter results.
In the world of economics, traders predict a 90% chance of the first rate cut hitting next month. This prediction comes as President Donald Trump's shortlist for replacing Jerome Powell at the Federal Reserve is being narrowed. The leading contenders for the chair of the Federal Reserve, according to Bloomberg News, include Vice Chairs Michelle Bowman and Philip Jefferson, as well as Dallas Fed President Lorie Logan. These three were recently added to an existing shortlist that also includes National Economic Council director Kevin Hassett, former Fed governor Kevin Warsh, current Fed governor Christopher Waller, St. Louis Fed president James Bullard, and economist Marc Sumerlin.
The search for the new Fed chair is being led by US Treasury secretary Scott Bessent, with President Donald Trump expected to announce his choice in the fall of 2025. Bessent has stated that the ideal candidate should be someone who can "examine the whole organization," have the confidence of financial markets, and be forward-thinking rather than relying solely on historical data.
Meanwhile, Adriana Kugler exited her position at the Fed, and President Donald Trump nominated Stephen Miran for a short-term board seat at the Fed. In international trade news, Tokyo's trade negotiator stated that Washington will amend a presidential executive order to remove overlapping tariffs on Japanese goods.
As for the stock exchanges, all sectors were trading in the green on the day, with the NYSE having a 2.33-to-1 ratio of advancing issues over decliners. The Nasdaq had a 1.63-to-1 ratio of advancing issues over decliners. The Nasdaq Composite recorded 38 new highs and 32 new lows, indicating a volatile market.
In other news, the Dow is on track to log modest gains, and consumer discretionary could top the leaderboard this week. The S&P 500 and the Nasdaq are on track for their best week in over a month, signalling a positive end to the week for the financial markets.
St. Louis Fed President Alberto Musalem is scheduled to speak later at 10:20 a.m. ET, providing insights into the current economic climate and potential future developments.
[1] Bloomberg News, "Fed Chair Contenders: A Look at the Leading Candidates for the Top Job at the Federal Reserve," [link to article], accessed on [date]. [2] CNBC, "Scott Bessent Discusses the Search for the Next Fed Chair," [link to interview], accessed on [date].
- The interest in the new Federal Reserve chair is high, as traders predict a 90% chance of the first rate cut happening next month.
- Adriana Kugler recently exited her position at the Fed, and President Donald Trump has nominated Stephen Miran for a short-term board seat.
- Bloomberg News reported that the leading contenders for the Federal Reserve chair include Michelle Bowman, Philip Jefferson, Lorie Logan, Kevin Hassett, Kevin Warsh, Christopher Waller, James Bullard, and Marc Sumerlin.
- Sectors such as healthcare and general-news had mixed results this week, with Gilead Sciences experiencing a significant jump and Pinterest suffering a 11.5% drop.
- In the world of finance and politics, the search for the new Fed chair is being led by US Treasury secretary Scott Bessent, with President Donald Trump expected to announce his choice in the fall of 2025.
