S&P 500 falls as Trump signals Powell’s ouster; crypto and J&J rally, EU stocks mixed

S&P 500 falls as Trump signals Powell’s ouster; crypto and J&J rally, EU stocks mixed

Wall Street pulled back midday Wednesday, with the S&P 500 down 0.5%, the Nasdaq Composite lower by 0.6 percent, and the Dow Jones Industrial Average dropping 200 points, as investors digested reports that President Donald Trump is “likely” to fire Fed Chair Jerome Powell soon.

A senior White House official told CNBC that Trump floated the idea to GOP lawmakers, who reportedly supported it. According to The New York Times, Trump has already drafted a dismissal letter. The news renewed fears about central bank independence, especially with Trump also calling for a 300 basis point rate cut on social media.

“Consumer prices low. Bring down the Fed rate, NOW!!!” Trump posted on Truth Social.

The political noise came a day after inflation data showed a 2.7 percent annual CPI rise in June — its highest since February — alongside signs of sticky core inflation. Powell had earlier suggested that tariff-driven inflation was a key reason the Fed hadn’t moved to ease policy this summer.

Despite the broader weakness, crypto markets rallied on renewed hopes for Trump-supported legislation. The GENIUS Act, a pro-crypto regulatory framework that previously stalled in the House, could soon move forward after key Republicans reportedly changed their stance following a White House meeting.

Bitcoin rose over 2 percent to $119,000, Ether climbed 5.5 percent, and Circle shares jumped 11 percent. Coinbase gained 2 percent, while BitMine soared 21 percent after Peter Thiel reportedly bought a stake.

Johnson & Johnson shares rose over 6.5 percent, on track for their best day in more than a year, after the healthcare major beat Q2 estimates and raised full-year guidance. The company reported adjusted EPS of $2.77 and revenue of $23.74 billion, both topping Street expectations.

With Wednesday’s move, the stock is up roughly 12 percent in 2025.

Technical indicators are flashing caution. According to BTIG, the S&P 500 has held above its 20-day moving average for 55 days, the longest streak since January 2021. Strategist Jonathan Krinsky warned this could precede a bout of volatility, especially with seasonally weak August approaching.

“We are clearly stretching the limits of time without a 20-DMA break… likely something closer to the 6,000 level heading into August,” he said.

European markets mixed 

European equities were mostly muted. The Stoxx 600 index traded just 0.06 percent higher, with autos down 1.3 percent and financials up 0.9 percent. UK inflation unexpectedly rose to 3.6 percent in June, but traders still see an 80 percent chance of a BoE rate cut in August due to softening job market signals.

Renault plunged 17 percent after slashing its 2025 guidance and appointing an interim CEO. Diageo initially rallied after announcing the exit of CEO Debra Crew, but gains faded to under 1 percent as tariff concerns and US sales weakness lingered. Meanwhile, Richemont topped sales forecasts thanks to its jewelry division, though watch sales in Asia lagged.

In semiconductors, ASML fell 7 percent after offering soft Q3 guidance, dragging down peers like ASM International, BE Semiconductor, STMicro, and Infineon.

Investors are also watching for tariff updates, as EU trade commissioner Maros Sefcovic travels to Washington for talks amid Trump’s escalating threats of 30% blanket duties.