Wall Street closed slightly higher despite midday turmoil triggered by reports that U.S. President Donald Trump considered firing Federal Reserve Chair Jerome Powell, causing sharp market swings before the White House denied the claims.
00:00Wall Street benchmarks closed modestly higher on Wednesday, with the Nasdaq Composite achieving its latest record finish, despite a chaotic half-hour when news reports suggested U.S. President Donald Trump was set to fire Federal Reserve Chair Jerome Powell.
00:15Shortly before midday, the benchmark S&P 500 and Nasdaq fell more than 1% while the dollar plunged and Treasury wheels rose after Bloomberg News reported the possibility of replacing Powell, citing an identified White House official.
00:30Separately, Reuters News reported, citing a source that Trump was open to the idea of firing Powell.
00:35Trump was quick to deny the reports, even as he unleashed a new barrage of criticism against Powell for not cutting interest rates.
00:43The big move was earlier in the day when a rumor came out that President Trump had said he was going to fire Federal Reserve Chairman Powell.
00:53And then we saw the markets react violently, both the bond market and the stock market, and the slow move back as that rumor or floated idea was increasingly clarified, and we were told that the president has no plan to fire Fed Chairman Powell.
01:10We had a bunch of financials report today, Goldman Sachs really reporting a strong quarter across the board, trading up, lots of departments up, a little bit of weakness in investment banking, but above expectations.
01:26And we know that that is a lighter area right now that everyone is looking to gain strength in the future.
01:33So, of course, the question is, why are these stocks down?
01:36They do look like they've bounced off the lows for the day, but I really think what we're seeing across the board is profit-taking.
01:43There was no comments from leaders about slowing growth.
01:47There's nothing under the covers that looks like it's causing a problem.
01:50For some of the banks yesterday, there was a little pressure on net interest margins, but that's not really what we're seeing today.
01:57But remember, these top leading banks and brokerage houses really have soared so far this year, while other sectors have struggled.
02:07There's been really great growth.
02:08And I do think all we're seeing here is profit-taking in a situation where the question is, how much better could it get after this report?
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