Wall Street Shaken but Not Stirred: Markets Edge Higher Amid Powell Drama

US stock markets ended Wednesday with modest gains, brushing off a jolt of volatility caused by reports that President Donald Trump was considering firing Federal Reserve Chairman Jerome Powell. In a show of resilience, the tech-heavy Nasdaq Composite climbed to yet another record.

Midday Panic, Swift Rebound

Around noon, things took a sharp turn: the S&P 500 and Nasdaq both dropped more than one percent, the dollar tumbled, and Treasury yields surged. The trigger was a Bloomberg report citing an anonymous White House source claiming Trump might be looking to replace Powell.

Another Milestone for Nasdaq

But by the closing bell, the markets had recovered their footing. The Nasdaq Composite added 52.69 points to end at 20730.49 — marking its fifth record finish in just six sessions.

The Dow Jones Industrial Average rose 231.49 points to close at 44254.78, while the S&P 500 advanced 19.94 points to finish at 6263.70.

Momentum Builds Despite Trade Tensions

Since Trump's announcement of new tariffs in April, which initially rattled markets, US equities have largely trended upward. Just last week, the S&P 500 posted a record-high close.

Volatility Index Spikes Briefly, Then Calms

The CBOE Volatility Index, often dubbed Wall Street's "fear gauge," spiked to its highest level in over three weeks following the Powell news. But the jump was short-lived, as calm quickly returned once the dust settled.

Investors Stick to Fundamentals Amid Headline Noise

Bell from CalBay emphasized that while headline-driven market swings will persist, it is the underlying strength of the US economy that truly shapes investor behavior. He stressed that solid economic fundamentals continue to outweigh short-term news shocks.

Bank Stocks Deliver Mixed Results

Goldman Sachs shares advanced by 0.9 percent after the bank posted a 22 percent increase in profits. Meanwhile, Bank of America and Morgan Stanley slipped by 0.3 and 1.3 percent respectively, even though both reported improved earnings.

Johnson and Johnson Surprises with a Jump

Healthcare heavyweight Johnson and Johnson surged by 6.2 percent, registering the second-best performance in the S and P 500. The company halved its expense outlook for the year due to lowered tariffs and raised its full-year sales and earnings forecasts.

Semiconductors Cool Off After Rally

After rallying in the previous session on news that Nvidia might be allowed to sell its H2O chips in China, semiconductor stocks lost some steam. The sector index retreated by 0.4 percent from the 12-month high it reached on Tuesday.

European Markets Rebound After Four-Day Dip

European stocks rebounded on Thursday following four consecutive sessions of losses. The recovery was driven by upbeat quarterly results from Swiss industrial giant ABB and renewed optimism over potential trade agreements between the US and the EU. The pan-European STOXX 600 index was up 0.8 percent as of early morning GMT.

ABB Soars on Record Orders Driven by AI and US Demand

Engineering powerhouse ABB saw its shares surge by 8.2 percent after reporting the highest-ever volume of quarterly orders. The spike was fueled by strong demand from the United States and increasing investment in data center infrastructure needed to support the growth of artificial intelligence.

Engineering Giants Lead the Rally

ABB's stellar performance lifted the entire sector. Shares of Germany's Siemens climbed by 3.6 percent, while France's Schneider Electric advanced by 5.8 percent. All three companies were among the top gainers in the European benchmark index.

Chipmakers Stage a Comeback

European semiconductor stocks began recovering losses from the previous session. Shares of ASML rose by 1.7 percent after a sharp drop on Wednesday. Market sentiment was boosted by a stellar earnings report from TSMC, the world's leading advanced chipmaker, which posted record profits for the second quarter thanks to sustained AI demand.

Gaming Tech Finds Momentum

Sweden's Evolution also saw a strong rebound, climbing 6.5 percent after the gaming technology firm released its second-quarter earnings, which exceeded market expectations.