Financial-Markets                      07/16 15:25

   

   NEW YORK (AP) -- President Donald Trump sent the U.S. stock market on a 
jagged round trip Wednesday after saying he had "talked about the concept of 
firing" the head of the Federal Reserve. Such a move could help Wall Street get 
the lower interest rates it loves but would also risk a weakened Fed unable to 
make the unpopular moves needed to keep inflation under control.

   The S&P 500 rose 0.3% after whipping through an earlier drop and subsequent 
recovery.

   The Dow Jones Industrial Average gained 231 points, or 0.5%, and the Nasdaq 
composite added 0.3% to its record set the day before.

   Stocks had been rising modestly in the morning, before news reports saying 
that Trump was likely to fire Fed Chair Jerome Powell quickly sent the S&P 500 
down by 0.7%.

   When later asked directly if he was planning to fire Powell, Trump said, "I 
don't rule out anything, but I think it's highly unlikely." That helped calm 
the market, and stocks erased their losses, though Trump added that he could 
still fire Powell if "he has to leave for fraud." Trump has been criticizing a 
$2.5 billion renovation project underway of the Fed's headquarters.

   Trump's main problem with Powell has been how the Fed has not cut interest 
rates this year, a move that would have made it easier for U.S. households and 
businesses to get loans to buy houses, build factories and otherwise boost the 
economy. Lower interest rates could also help the U.S. government, which is set 
to borrow and add a lot more to its debt after approving a wide range of tax 
cuts.

   Powell, meanwhile, has been insisting that he wants to wait for more data 
about how Trump's stiff proposed tariffs will affect the economy and inflation 
before the Fed makes its next move.

   The Fed has two main jobs: keeping the job market strong while keeping 
inflation under control. Lowering interest rates would help boost the economy 
but would also give inflation more fuel when tariffs may be set to push prices 
for U.S. households higher.

   A report on Wednesday said inflation at the wholesale level slowed to 2.3% 
last month, which was better than economists expected. It's an encouraging 
signal, but it came a day after another report suggested that Trump's tariffs 
are pushing up the prices U.S. shoppers are paying for toys, apparel and other 
imported products.

   Trump's tariffs are making their weight felt across financial markets. ASML, 
the world's leading supplier of chipmaking gear, warned that it can't guarantee 
growth next year, after delivering an expected 15% growth in sales for 2025.

   Conditions still look strong for ASML's customers in the 
artificial-intelligence business, but CEO Christophe Fouquet said in a video 
that "the level of uncertainty is increasing, mostly due to macroeconomic and 
geopolitical consideration. And that includes, of course, tariffs."

   Shares that trade in the United States of ASML, which is based in the 
Netherlands, fell 8.3%.

   Stocks of several U.S. companies reporting stronger profits for the latest 
quarter than analysts expected helped offset that.

   Johnson & Johnson jumped 6.2% after the drug and medical device giant beat 
analysts' sales and profit targets and raised its full-year forecasts for both. 
CEO Joaquin Duato said it expects "game-changing approvals and submissions" in 
the second half of 2025 on an array of products, including for lung and bladder 
cancer.

   PNC Financial Services Group added 0.9% following its better-than-expected 
quarterly report, thanks in part to loan growth despite what CEO Bill Demchak 
called "an uncertain macro environment."

   GrabAGun, an online retailer of firearms and ammunition, swung sharply after 
combining with Colombier Acquisition Corp. II and taking its spot on the stock 
market under the ticker symbol "PEW." Donald Trump Jr., the son of President 
Trump, is joining the company's board.

   The stock quickly went from an early gain of 19% to a drop of 31% before 
finishing with a loss of 23.9%, with several halts in trading along the way.

   All told, the S&P 500 rose 19.94 points to 6,263.70. The Dow Jones 
Industrial Average added 231.49 to 44,254.78, and the Nasdaq composite gained 
52.69 to 20,730.49.

   In the bond market, the yield on the 10-year U.S. Treasury fell to 4.45% 
from 4.50% late Tuesday. It had been as low as 4.44% earlier in the day, but it 
climbed following the reports that Trump was likely to fire Powell.

   A new Fed chair friendlier to Trump could mean lower short-term interest 
rates but also the opposite effect on longer-term yields. That's because a less 
independent Fed would raise worries that it may also let inflation run higher 
in the future by being slow to raise interest rates.

   In stock markets abroad, indexes mostly fell amid relatively modest 
movements.

   Stocks rose 0.7% in Jakarta after Trump said Tuesday that he plans to charge 
imports from Indonesia a tariff of 19%, instead of the 32% that he had 
threatened earlier, after reaching a trade deal.

   Indonesia's central bank also cut its key interest rate by 0.25 percentage 
points on Wednesday, to 5.25%.

   "We have calculated everything and discussed everything. The most important 
thing for me is my people, as I must protect the interests of our workers," 
Indonesian President Prabowo Subianto told reporters, adding that "this is our 
offer, and we are not able to give more (to the United States)."

   ___

   AP Business Writers Matt Ott, Kelvin Chan and Elaine Kurtenbach contributed.

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