Just as investor sentiment was recovering on the geopolitical front, supported by the ceasefire between Israel and Iran, President Donald Trump once again shook the markets with a attack on the Fed chairman, which has reignited concerns about theindependence of the central bank and the expectations ofrate cuts. The result was another wave of dollar sales, which pushed the'EUR at its strongest level since November 2021 and the Swiss franc at its highest in a decade. Yields on treasury bonds US yields fell across all major maturities, with 10-year yields falling two basis points to 4,27%. Nvidia's star shines again on Wall Street.
I duties Trump's bids are back in the spotlight on markets as the July 9 trade deal deadline approaches, but also defense titles after the leaders of the NATO they reached an agreement on a large spending increase that Trump had requested.
Fed, but can Trump really fire Powell?
According to what reported by Wall Street Journal, Trump reportedly considered nominating the substitute of the chairman of the Fed Jerome Powell already in September, an unusually early appointment that could effectively create a shadow Fed chairman with the power to influence market sentiment.
Trump has repeatedly criticized Powell for not cutting interest rates and again on Wednesday called him “terrible,” eroding investors’ confidence in the U.S. central bank’s independence in setting policy. Earlier this month, Trump openly considered firing Powell and even considered nominating himself as Fed chairman, though he later backtracked. “I’ve got three or four people in my head that I’m going to pick from,” Trump told reporters Wednesday when asked if he was interviewing candidates to replace Powell.
In theory a president cannot fire easily a Fed chairman, legal experts say. Section 10 of the Federal Reserve Act states that members of the Fed's Board of Governors, of which the chairman is one, can be “removed for just cause by the president,” meaning misconduct or abuse of power. Powell’s term as president is set to expire in 2026, while his 14-year term as governor is set to end in 2028.
Trump's contentious relationship with the Fed has fueled uncertainty about direction of interest rates, at a time when traders are focusing on the impact that Trump's tariffs could have on consumers, putting pressure on inflation. Recently, Fed governors Christopher Waller and Michelle Bowman have recently signaled their willingness to lower rates as early as July, if inflation remains subdued. But Powell remains cautious: he told a Senate committee yesterday that it was “very difficult to predict” the inflationary impact.
Wall Street, Nvidia's star shines again
U.S. stocks broadly took a breather yesterday, snapping a two-day rally, with the'S&P 500 and the Dow Jones which closed in negative territory (at -0,02% and -0,25% respectively), while the Nasdaq (+0,31%) was supported by a Nvidia stellar that has cemented its position as one of the most valuable companies in the world.
Shares of the AI chip leader rose 4,3% to $154,31, hitting an all-time high since January. The record was just the latest milestone for the company, which has surged 63% from its April low, a rally that has added nearly $1.500 trillion to its market cap. The daily gains kept Nvidia the world's largest stock, with a market cap of about $3,77 trillion, surpassing ecosystem Corp. to $3,66 trillion. Nvidia's recent earnings were a notable catalyst for bulls, as the report showed solid growth and pointed to further strength ahead, despite the impact of restrictions on advanced semiconductor sales in China. Data from Microsoft Corp. , Meta Platforms Inc., Alphabet Inc. and Amazon.com Inc. — which together account for more than 40% of Nvidia's revenue, according to supply chain data compiled by Bloomberg – further highlighted how the company's major customers continue to invest aggressively in developing their own AI infrastructure. Yesterday, during Nvidia's shareholder meeting, theCEO Jensen Huang reassured investors about the strength of demand. He reiterated his view that the computer industry is only at the beginning of a massive modernization of the AI infrastructure.
Tesla, on the other hand, fell 3,8% after European sales data fell for the fifth month.
FedEx shares fell 3,3% after the package delivery company forecast a lower-than-expected quarterly profit as tariffs weighed on global demand. Competitor UPS fell 1,2%.
I US government bondsthey have also strengthened due to the revision of the valuation mechanisms of Treasuries held in the portfolios of large banks. The Federal Reserve has decided to lower the supplementary coefficient on leverage.
Today, the Department of Commerce will release its Final GDP report of the first quarter, while tomorrow's Personal Consumption Expenditures (PCE) report will provide insights into consumer spending and inflation.
Dollar weighs on prospect of US rate cut
The continued pressure for a rate cut has weakened the greenback. The index of dollar, which measures the currency against six other units, is down 10% this year and on track for a sixth consecutive month in negative territory. The last time it posted a similar performance was in 2017, raising questions about the role of the greenback in global trade. A basket of Asian currencies gained about 4% against the dollar. The euro rose 0,2% to its highest level in nearly four years at $1,168. The Japanese yen rose 0,2% to 144,90 per dollar
Meanwhile the de facto central bank of Hong Kong spent more than $1 billion to prop up the city's exchange rate, managing a fixed exchange rate strained by the dollar's volatility.
Il Petroleum gained ground for the second day in a row, as investors grapple with a tenuous ceasefire in the Middle East. West Texas Intermediate crude rose 0,4% to $65,15 a barrel. Despite the stabilization in prices, the market remains tense. Russia said it was open to a further increase in production at the next OPEC+ meeting. The Bitcoin remained virtually unchanged at $107.946,67, the ether rose 1,9% to $2.485,17. The spot rose 0,2% to $3.337,50 an ounce.
Asia, Tokyo gas in talks with the US
Asian stocks are mixed, with the Tokyo Stock Exchange rising and Hong Kong and Seoul falling. The Nikkei index Tokyo is up 1,2%. Worth noting Tokyo Gas that is in talks with several U.S. liquefied natural gas suppliers to secure a long-term purchase agreement, as rising energy demand makes Japan increasingly dependent on the fuel source. The country's largest gas distributor is in talks with at least four U.S. Gulf Coast companies, writes Bloomberg. Among the exporters are Energy Transfer and Commonwealth. Also in Japan, there are signs of stability from the oil market. government bondsDemand at the two-year government bond auction was the strongest since January, as recent volatility at the long end of the yield curve increased investor appetite for shorter-dated debt.
China stocks mixed. Hong Kong's Hang Seng down 0,4%. Shanghai and Shenzhen's CSI 300 indexes flat. Taipei's Taiex up 0,3%, following Nvidia's record on Wall Street. South Korea's stock market down 1,2%. Mumbai's BSE Sensex up 0,5%.
European stocks seen opening slightly higher. At Piazza Affari eyes on Leonardo and Banca Mediolanum
European stock markets are expected to open slightly higher with the EuroStoxx50 index futures up 0,3%.
Germany. German consumer confidence is set to decline slightly ahead of July, as rising household savings counteracts improving income prospects. The consumer sentiment index fell to minus 20,3 from a slightly revised minus 20,0 a month earlier, according to a survey by market research firm GfK and the Nuremberg Institute for Market Decisions. Analysts polled by Reuters had expected minus 19,3.
Leonardo. Mediobanca raises the target price to 61 euros. NATO members voted in favor of increasing spending to 5% – in the division of 3,5+1,5 percent. The text of the final declaration provides that the “allies will allocate at least 3,5% of annual GDP, by 2035, to finance basic defense requirements and to meet NATO capability objectives”. The decision translates into an increase in spending for the extended military of about 400 billion euros per year, over ten years.
Banca Mediolanum is reportedly evaluating the sale of its historic stake of approximately 4,5% in Mediobanca, signaling the intention not to take sides in the battle for the control of Piazzetta Cuccia, according to rumors Il Sole 24 Ore
. The final decision, the newspaper explains, has not yet been taken and will be up to the board of directors, which does not have the topic on the agenda at today's meeting. Any withdrawal would impact the consultation agreement which currently brings together approximately 12% of the capital, already reduced after the exit of Victory Insurancei Spa on June 20. Under the terms of the agreement, Mediolanum is free to sell the shares, provided it notifies the company within five days.
An exit from the Mediobanca stake could also avoid Mediolanum from having to take a position on the takeover bid launched by Banca Monte dei Paschi di Siena Spa, led by Luigi Lovaglio, on Piazzetta Cuccia. According to what emerged from the cancelled Mediobanca meeting, Lovaglio has already collected consensus equal to 45% of the capital. In the past, Doris had expressed himself favorably on the takeover bid promoted by Alberto Nagel on Banca Generali Spa, calling it "a good operation".
Fincantieri has announced that it has received two orders for the construction of two multi-mission combat ships: the value of the works, commissioned by the Italian Navy, is approximately 700 million.
