Midday Reversal: S&P 500 Brushes Off Powell Firing Rumors—For Now
So, things got a bit wild this morning. We came in with markets holding up okay, but then the Powell chatter hit and threw a wrench into the works.
Now here we are midday, and the S&P 500 has clawed back into positive territory—up about 0.2% after being down as much as 0.6% earlier. The Dow’s bounced by 115 points, and the Nasdaq’s squeaked out a 0.1% gain. Volatile tape, to say the least.
What’s the real driver behind the volatility today?
The big swing came after a senior White House official told CNBC that Trump is “likely” to remove Powell. The New York Times added fuel, saying Trump even drafted a termination letter. That headline knocked the S&P E-minis down to 6,241 in early trade before a bounce.
Trump’s later walk-back—that it’s “highly unlikely” Powell gets fired—helped stabilize things, though he still left the door open. That was enough to cool the selloff, but the market clearly doesn’t trust the story is over.
How’s the economic backdrop feeding into this?
The inflation narrative isn’t improving. Tuesday’s CPI showed a monthly rise, and today’s PPI came in flat—but under the hood, costs remain sticky. And Powell’s already said the Fed would’ve likely cut by now if not for the White House’s tariffs pushing inflation higher.
So traders are stuck between political interference risk and sticky inflation. And quite frankly, that’s not a great combo when we’re sitting near all-time highs.
Which stocks are standing out right now?
Bank earnings are mixed. Morgan Stanley beat, but the stock’s down over 3.5%, probably just working off some of the recent run. Johnson & Johnson is a standout—up over 6% after solid earnings and raised guidance.
Elsewhere, ASML dropped around 10% after warning about flat growth into 2026, which weighed on the chip space. SolarEdge got hit hard—down over 8% after a downgrade. Meanwhile, crypto stocks are catching a bid on stablecoin regulation hopes. Bitmine surged 15% after Peter Thiel’s fund disclosed a stake.
Where could we go from here?
Technically speaking, on the E-mini S&P 500 Futures, the market has breached both initial support levels—6,259.75 and 6,246.25—with an intraday low of 6,241.00, signaling a failure to hold the most recent short-term floor.
That breakdown puts the short-term uptrend in question and opens the door to a potential correction. The next key levels now sit at the 50-day moving average at 6,059.60, which aligns with a prior consolidation range from late June. Below that, the focus shifts to the 200-day moving average at 5,994.85, a widely watched technical floor. Just beneath it, 5,959.00 marks a horizontal support level from early July, adding additional weight to that zone.
We’re still holding the higher end of the range, but more likely than not, we’re in a bit of digestion mode here. If Powell headlines resurface or inflation pressures grow, we could see a retest of those levels. But for now, the market’s showing it still wants to defend dips—at least until it doesn’t.
We’ll see how that plays out into the close.
More Information in our Economic Calendar.
