Trump says he has no plans to fire Powell; TSMC reports - what’s moving markets

Investing.com - U.S. stock futures are subdued in the wake of a dramatic session that saw equities whipsaw on reports that President Donald Trump was planning to fire Federal Reserve Chair Jerome Powell. Trump later denied the rumors, but did not rule out the chance he could oust Powell. Meanwhile, a survey of U.S. businesses indicates a rise in economic activity, but fears remain over tariff-driven murkiness in the wider outlook.

1. Futures muted

U.S. stock futures were broadly steady on Thursday, as traders looked ahead to a fresh batch of corporate earnings.

By 03:30 ET (07:39 GMT), the Dow futures contract and S&P 500 futures were mostly unchanged, and Nasdaq 100 futures were higher by 28 points, or 0.1%.

The main averages rose after a volatile session on Thursday. Stocks were initially dented, while the dollar weakened and gold jumped, following reports that President Trump was likely to dismiss Powell. But equities rallied after Trump said he had no plans to oust the Fed Chair (more below).

"For less than an hour yesterday, it looked as if Trump was about to remove [...] Powell," analysts at ING said in a note to clients. "After yesterday’s scare, markets have probably built even more resistance to headlines on this topic."

Underpinning sentiment as well were surprisingly unchanged month-on-month producer price figures for June, which helped to soothe some jitters fueled by a separate report earlier this week that showed an acceleration in consumer price gains.

2. Trump refutes reported plan to oust Powell

Yet much of the focus revolved around Trump’s ongoing campaign against Powell.

The Fed leader has been a frequent recipient of Trump’s trade-related ire, with the president criticizing Powell for not moving to quickly slash interest rates. Powell, in large part because of economic uncertainty stemming from Trump’s tariffs, has recently backed a wait-and-see approach to future policy changes.

On Wednesday, Trump said that while he is not planning to fire Powell, and denied a report that he was, he has not ruled out the possibility of an ouster.

He added that he felt it was “highly unlikely” that Powell would be dismissed over fraud, referencing Republican complaints about the elevated costs of the Fed’s $2.5 billion renovation of its Washington headquarters. The Fed has defended its handling of the project.

Trump later suggested in an interview that he would “love” to see Powell resign, but noted that that would be up to the Fed Chair. Powell, who was originally appointed by Trump in 2017, has said he plans to serve the rest of his term, which ends in May 2026.

3. Beige Book shows rise in U.S. economic activity

U.S. economic activity rose in June and early July, but the outlook remains clouded by the potential impact of Trump’s aggressive tariff agenda, according to the so-called "Beige Book" from the Federal Reserve.

The report, which brings together comments from American businesses and aims to provide a snapshot of the state of the economy, showed that while activity had accelerated in recent weeks, companies were "neutral to slightly pessimistic" about the wider outlook.

"Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer," the Beige Book said. The survey included comments, interviews and observations from commercial and community contacts of each of the Fed’s 12 regional branches.

All of the districts said they were seeing the effect of the tariffs -- many in the guise of price increases by firms, although some companies said they were benefiting from increased reshoring of overseas operations.

4. Netflix earnings ahead

A parade of U.S. company reports are due out on Thursday, highlighted in particular by numbers from Netflix (NASDAQ:NFLX) after markets close.

Analysts at Vital Knowledge said they anticipate that the group will "put up very healthy results as its dominance" of the streaming sector "expands," although worries remain that the near-term expectations around Netflix may be "too frothy."

Elsewhere on the docket, GE Aerospace (NYSE:GE), Pepsico (NASDAQ:PEP), Elevance Health (NYSE:ELV), and Cintas Corporation (NASDAQ:CTAS) are among the names set to post their latest returns prior to the opening bell on Wall Street.

The Vital Knowledge analysts suggested that a slew of upbeat earnings and guidances in recent days have provided a source of optimism for equities.

5. TSMC second-quarter profit soars

Taiwan Semiconductor Manufacturing Co (TW:2330) (TSMC) clocked record profit in the second quarter on Thursday, beating market expectations, as the world’s biggest contract chipmaker was bolstered by ever-more robust artificial intelligence demand.

CEO C.C. Wei said that he saw few chances of AI-driven demand slowing in the coming months. But Wei flagged some caution over the fourth quarter of 2025, stemming from uncertainty over the impact of trade tariffs.

TSMC’s net income rose 60.7% to T$398.27 billion ($13.52 billion) in the three months to June 30. The result was higher than Reuters expectations of T$377.4 billion, and translated to earnings per share of T$15.36.

Revenue jumped 38.6% to T$933.79 billion, the company said in a statement.

The strong returns were driven chiefly by AI-fueled demand for TSMC’s 3 nanometer and 5nm wafer technology, which is a key component of advanced AI processors.

This helped offset a smaller revenue contribution from smartphone and device chip sales, as well as foreign exchange headwinds.