July 16th, 2025
Stocks Climb as Inflation Cools and Earnings Impress
U.S. equity markets were modestly higher today, building on momentum after the Nasdaq notched a fresh record high yesterday. Investor optimism is buoyed by softer-than-expected inflation data and a strong start to the earnings season. The health care sector is leading the charge, with Johnson & Johnson jumping over 5% after posting better-than-expected Q2 earnings and raising its full-year sales guidance.
In the financial sector, Goldman Sachs reported its best-ever quarter for stock trading, while Morgan Stanley also benefited from heightened April market volatility. Despite these strong results, both banks are trading lower in early action, indicating some profit-taking.
Things changed course when Bloomberg reported that Trump is likely to fire Powell soon, citing a White House official.
All three major indexes fell after the news to touch lows for the day. The S&P 500 fell 0.45%, while the Dow Jones Industrial Average fell 0.3%. The Nasdaq Composite dropped nearly 0.6%.
Meanwhile, in Europe, the EU Commission approved Germany’s multiyear fiscal plan, which allows for expanded government spending through 2029. The plan includes new borrowing equal to about 20% of the country’s current annual GDP.
Economic Takeaways:
- President Trump announced a new agreement with Indonesia, although details remain limited. He also suggested potential new tariffs focused on the pharmaceutical and semiconductor sectors.
- Producer price inflation was unchanged in June, reinforcing expectations that the Federal Reserve may lower interest rates later this year. Both headline and core producer price indexes (PPI) came in flat, defying estimates for modest increases. Year-over-year, headline PPI rose 2.3%—its lowest level since September 2024—while core PPI cooled to 2.6%, down from May’s 3.2%.
- The 10-year Treasury yield climbed near 4.8% after the headlines started to percolate, while the 30-year yield surged above the critical 5% threshold.
- Bloomberg reported Wednesday, citing a White House official, that Trump was considering firing Powell “soon.”
- The dollar quickly fell as much as 1% against the Japanese yen, lost about 0.7% against the euro, and fell about 0.5% against the British pound. The dollar index fell about 0.7%.
- According to the CME Group, traders are pricing in a 44% chance that the Fed will not cut rates in September, up from 30% last week.
- Bitcoin (/BTC) bounced back 2% after falling more than 2% on Tuesday when the U.S. House unexpectedly blocked a procedural vote on several crypto-related bills backed by President Trump. Later, Trump said he had secured the necessary votes in Congress to move the legislation forward. Stocks tied to crypto—including Strategy (MSTR), Circle Internet Group (CRCL), and Coinbase (COIN)—which sank Tuesday, all rebounded in early Wednesday trading.
Trump Tells GOP Lawmakers He May Soon Fire Fed Chair Powell
President Trump has reportedly told Republican lawmakers he is leaning toward firing Federal Reserve Chair Jerome Powell, according to a senior White House official who spoke with The Hill. The comments were made during a Tuesday evening Oval Office meeting with 11 hardline House Republicans, following their revolt earlier that day over a set of cryptocurrency bills.
“The President asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he likely will soon,” said the official. A second source confirmed that account.
“No, we’re not planning on doing anything,” Trump told reporters, but added, “We’re very concerned.”
“He’s doing a lousy job, but no, I’m not talking about that. Fortunately, we get to make a change in the next eight months or so, and we’ll pick somebody that’s good,” Trump said.
Despite those behind-closed-doors remarks, Trump publicly backed away from the idea when questioned by reporters, saying, “I don’t rule out anything but I think it’s highly unlikely. Unless he has to leave, fraud.” He also denied having drafted a termination letter for Powell.
Bitcoin and Crypto Stocks Climb as Stablecoin Legislation Gains Momentum
Bitcoin (BTC-USD) and cryptocurrency-related stocks rebounded Wednesday amid renewed optimism surrounding three key crypto bills that had stalled in the House of Representatives a day earlier.
Republican Representative and Financial Services Committee Chairman French Hill told CNBC on Wednesday that the House now has the votes needed to pass the trio of bills: the CLARITY Act, which outlines a regulatory framework for digital assets; the GENIUS Act, focused on stablecoin oversight; and the Anti-CBDC Surveillance State Act, aimed at preventing the Federal Reserve from directly issuing a central bank digital currency to individuals.
Crypto-related equities rallied on the news. Shares of stablecoin issuer Circle (CRCL) surged nearly 14%, while Coinbase (COIN) gained 2.6%. Robinhood (HOOD) rose 3.5%, and Strategy (MSTR) added 2.6%.
Bitcoin advanced 1.4%, nearing $119,000, after briefly topping $120,000 earlier in the week.
Hill’s remarks followed a post from President Trump on Truth Social late Tuesday, in which he expressed confidence in the GENIUS Act’s prospects.
“I am in the Oval Office with 11 of the 12 Congressmen/women necessary to pass the GENIUS Act and, after a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule,” Trump wrote.
On the Move
- Johnson & Johnson (JNJ) stock climbed nearly 5% on Wednesday after the drugmaker’s latest earnings results topped expectations and the company raised its financial outlook for the year.
- ASML (ASML), a key supplier of semiconductor manufacturing equipment, lowered its growth forecast for 2026, citing concerns over geopolitical tensions and ongoing trade disputes that could impact future performance. Despite reporting stronger-than-expected bookings, shares tumbled 8% on the guidance revision.
- Meanwhile, earnings from major Wall Street banks painted a mixed picture. Goldman Sachs (GS) and Bank of America (BAC) each rose 1%, while Morgan Stanley (MS) slipped 0.7%. Although overall bank profits jumped in the second quarter, Morgan Stanley’s investment banking division underperformed compared to Goldman and JPMorgan Chase. Bank of America CEO Brian Moynihan highlighted that consumer spending has remained consistent.
- SharpLink Gaming (SBET) saw its stock surge 14% on Wednesday after revealing it is now the largest corporate holder of ethereum (ETH-USD). The casino and sportsbook marketing partner holds 280,706 ETH in its corporate treasury, valued at approximately $840 million.
- CoreWeave (CRWV) added another 1% following a strong rally the previous day. The continued gains came after the chipmaker announced plans to invest $65 billion in a cutting-edge data center in Pennsylvania. According to Barron’s, the massive AI infrastructure initiative is being developed in partnership with Alphabet’s Google (GOOGL) and investment giant Blackstone (BX).
- Nvidia (NVDA) slipped after a sharp gain on Tuesday, when it was revealed, the company would resume sales of its H20 chip in China. The news also gave a lift to rival chipmakers Advanced Micro Devices (AMD) and Broadcom (AVGO), as well as Taiwan Semiconductor Manufacturing (TSM), which is set to report earnings tomorrow.
- Arm Holdings (ARM) gained 2.3% early Wednesday after BNP Paribas Exane upgraded the stock to Outperform from Neutral.
What’s Ahead
July 17: June retail sales and expected earnings from Abbott Laboratories (ABT), Marsh & McLennan (MMC), PepsiCo (PEP), Taiwan Semiconductor Manufacturing (TSM), Travelers Companies (TRV), and Netflix (NFLX).
July 18: June housing starts, June building permits, July preliminary University of Michigan Consumer Sentiment, and expected earnings from 3M (MMM) and SLB (SLB).
Pump Radar
Stock Alerts