Oleksandr Pylypenko
9 min read
September S&P 500 E-Mini futures (ESU25) are up +0.33%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.41% this morning amid speculation that U.S. interest rate cuts could arrive earlier than expected, following a report that U.S. President Donald Trump may nominate the next Federal Reserve chair early.
The Wall Street Journal reported that President Trump is considering announcing his pick to replace Jerome Powell as early as September amid his frustration over the Fed’s cautious pace on rate cuts. Typically, a Fed chair is nominated 3-4 months before taking office, and with Powell’s tenure not concluding until May 2026, this could effectively result in a shadow central bank chair with the ability to influence sentiment. OCBC strategists said, “Some believe that this may allow for the chair-in-waiting to influence market expectations about the potential path for rates.”
Investors now await a flurry of U.S. economic data, including the third estimate of first-quarter GDP and jobless claims figures, remarks from Federal Reserve officials, and an earnings report from shoemaker Nike.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. Super Micro Computer (SMCI) climbed over +8% and was the top percentage gainer on the S&P 500 after GF Securities Ltd initiated coverage of the stock with a Buy rating and a price target of $59. Also, Nvidia (NVDA) rose more than +4% and was the top percentage gainer on the Nasdaq 100 and Dow after Loop Capital raised its price target on the stock to $250 from $175, citing what it described as a “$2 trillion AI data center opportunity” by 2028. In addition, QuantumScape (QS) jumped over +30% after the company announced it had successfully integrated its advanced Cobra separator process into baseline cell production. On the bearish side, Paychex (PAYX) plunged more than -9% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the company reported in-line FQ4 results.
Economic data released on Wednesday showed that U.S. new home sales fell -13.7% m/m to a 7-month low of 623K in May, weaker than expectations of 694K.
Fed Chair Jerome Powell said during a Senate Banking Committee hearing on Wednesday that the central bank is still struggling to determine the impact of tariffs on consumer prices. “The question is, who’s going to pay for the tariffs?” Powell told lawmakers in response to a question on the second day of his semi-annual testimony to Congress. “How much of it does show up in inflation. And honestly, it’s very hard to predict that in advance.” The Fed chief also stated that the U.S. has the world’s strongest economy and that moving cautiously is appropriate during periods of uncertainty.
