The S&P 500 notched a weekly gain on Friday, led by tech, as bets on a September rate cut were boosted after Trump nominated his top economic adviser, Stephen Miran, to fill a vacant seat on the Fed board at a time when focus on Fed chairman Jerome Powell’s potential successor is heating up.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 207 points, or 0.5%, the S&P 500 index gained 0.8%, and the NASDAQ Composite climbed 1 to clinch a record close of 21,450.02.
Fed rate cut bets jump; Trump expands list of candidates to replace Powell
The Trump administration’s tariffs took effect from Thursday, imposing import duties as high as 50% on regional economies.
Several countries have thrashed out trade deals with the U.S., including the European Union, reducing their tariff levels, but investors remained on edge over the economic impact of the duties.
The new tariffs from 10% to 41% went into effect earlier this week on more than 90 countries, taking the average tariff rate above 15%, up from 2.3% at the start of the year and the highest since 1938.
A rise in weekly jobless claims on Thursday added to signs of a further cooling in the labor market, especially after last week’s disappointing jobs report.
These readings have furthered bets that the Federal Reserve will cut interest rates in September.
U.S. President Donald Trump has repeatedly called on the central bank to cut interest rates, and announced on Thursday that his top economic adviser, Stephen Miran, will be his pick to take an empty governor seat at the Fed, replacing Adriana Kugler abruptly stepped down from the role as a Fed governor last week.
If confirmed by Senate lawmakers, Miran would have the ability to vote on upcoming interest rate decisions. Notably, Miran has been a consistent supporter of Trump, and has particularly argued that sweeping U.S. tariffs will not massively drive up inflation domestically and the costs of the levies will instead fall mostly on overseas suppliers.
Trump has said Miran will serve in the role temporarily, but hinted that it could be extended.
"We will continue to search for a permanent replacement," Trump said in a social media post. Crucially, that person could be the one who eventually replaces Powell after his term at the head of the Fed ends next year.
After reports surfaced on Thursday, suggesting that Fed governor Christopher Waller was a leading candidate to replace Powell, Trump has now expanded the list to include St. Louis Fed President James Bullard; Marc Sumerlin, and former top economic advisor to President George W. Bush, The Wall Street Journal reported Friday. National Economic Council director Kevin Hassett and former Fed governor Kevin Warsh are also in the running.
Solid quarterly earnings
With more than two-thirds of the benchmark S&P 500 having reported their latest quarterly results, the number of those firms whose earnings have topped estimates is one of the highest in recent history, according to analysts at HSBC.
Source :
https://www.investing.com/news/stock-market-news/us-stock-futures-rise-amid-tech-strength-fed-succession-watch-4178716
