Stocks looked set to rise on Thursday after The Wall Street Journal reported that President Donald Trump was considering naming the next chief of the Federal Reserve in September or October, which fueled bets that the central bank would cut interest rates sooner than expected.
Futures tracking the Dow Jones Industrial Average climbed 66 points, or 0.2%. S&P 500 futures gained 0.2%, with the benchmark index within striking distance of a record, and contracts tied to the tech-heavy Nasdaq 100 rose 0.3%.
Trump has mulled accelerating when he will name his pick to succeed Fed Chair Jerome Powell, according to the Journal, which cited people familiar with the matter.
Trump has attacked Powell in recent months for not cutting interest rates, but the central banker’s term runs for another 11 months. Announcing his replacement early would enable the chair-in-waiting to influence investors’ expectations about the likely path of rates, which could in turn put pressure on policymakers to lower borrowing costs.
The U.S. Dollar Index, which tracks the greenback’s strength against a weighted basket of other currencies, slipped 0.5% on the news that Trump could select and announce Powell’s replacement early. The yield on the benchmark 10-year U.S. Treasury note slipped 2 basis points to 4.27%.
Powell gave testimonies to two congressional committees this week and while his remarks did little to move the market outlook, they have re-centered rates as a top-of-mind issue for markets after nearly two weeks of worrying about whether the Iran-Israel war would spark a surge in oil prices.
“With markets holding steady, we’re now at a point where the focus is turning to several important catalysts,” Deutsche Bank strategist Jim Reid said in a morning research note, adding that Trump’s signature tax bill, tariffs, and the July 15 consumer inflation report could all move stock prices over the next two weeks.