Wall Street appeared calm on Wednesday after US President Donald Trump backtracked his earlier threats to fire Federal Reserve Chair, Jerome Powell.
While futures for the S&P 500 were unchanged before the opening bell Thursday, while futures for the Dow Jones Industrial Average lost 0.2 per cent and those of Nasdaq rose less than 0.1 per cent.
Trump has been critical of Powell and his colleagues for not decreasing interest rates at a time when the economy has been relatively stable and unemployment low.
Cost overruns on the USD 2.5 billion renovation project as the Fed’s Washington headquarters have been a major trigger for Trump to fire the central bank chief, he said previously.
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Wall Street prefers lower interest rates because they goose prices for stocks and other investments, and Trump himself has been clamouring for the Fed to cut more quickly.
Powell has been insistent on wanting to wait for more data, especially regarding Trump’s tariffs and their effect on the economy and inflation.
Both markets and the dollar took a dive on Wednesday after reports that Trump was mulling about terminating Powell. It was only after he backtracked his sentiments that the Wall Street stabilised.
A number of companies early in the earnings season have been reporting strong performances, even as they cite uncertainty about the near future due to the potential impacts of Trump’s tariffs.
PepsiCo shares rose 2 per cent before the bell Thursday after the beverage and snack giant's second-quarter sales and profit topped Wall Street projections.
PepsiCo reaffirmed its April guidance, which projected lower full-year profit than previous forecasts due to increased costs from tariffs and a pullback in consumer spending.
The world's largest chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), reported huge increases in sales and profit from a year ago, sending its stock up 3.4 per cent in early trading. However, TSMC, a major supplier for Nvidia, warned that “uncertainties and risks from the potential impact from tariff policies exist.” Shares of United Airlines, which reported after the bell Wednesday, dipped 1.6 per cent overnight after the carrier's second-quarter revenue came in a touch lower than expected. United also cut its full-year profit guidance.
Also falling early Thursday are shares of Archer-Daniels-Midland and Ingredion, makers of high fructose corn syrup. President Donald Trump said Wednesday that Coca-Cola has agreed to use real cane sugar in its flagship soft drink in the US at his suggestion — though the company has yet to confirm that.
Ingredion tumbled almost 6 per cent early Thursday, and Archer-Daniels-Midland fell 3 per cent.
Netflix reports earnings after markets close.
New data on jobs and retail sales are due early Thursday as well.
In Europe at midday, Germany's DAX gained 0.8 per cent, while the CAC 40 in Paris rose 0.9 per cent and Britain's FTSE 100 added 0.4 per cent.
Asian markets also were mostly higher.
Tokyo's Nikkei 225 index gained 0.6 per cent to 39,901.19 after the government reported a trade deficit for the first half of the year as Japan's exports to the United States took a hit from Trump's tariffs.
The Hang Seng in Hong Kong shed early gains to close down 0.1 per cent at 24,498.95, while the Shanghai Composite index gained 0.4 per cent to 3,516.83.
Australia's S&P/ASX 200 advanced 0.9 per cent to 8,639.00.
In South Korea, the Kospi climbed 0.2 per cent to 3,192.29.
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