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Trump reverses course: Powell safe, for now 17/07/2025

HOT stories for today

 

US market wrap:

  • On Wednesday, the S&P 500 climbed 0.32%, the Nasdaq Composite added 0.26%, and the Dow Jones Industrial Average advanced 231 points, or 0.53%. Markets opened lower after a White House official suggested Trump might soon remove Fed Chair Powell, with the Dow dropping over 260 points intraday. A New York Times report revealed Trump had even drafted Powell’s resignation letter. Stocks later rebounded as Trump downplayed the reports, saying he’s “not planning on doing it”, but also that he doesn’t “rule out anything.” 
  • As prices climbed, financial services stocks led the charge for a second straight day, driven by another round of bank earnings. Goldman Sachs (GS) set new records in trading revenue, while Johnson & Johnson (JNJ) eased tariff concerns by lowering forward-looking risks.  By session’s end, eight of eleven S&P 500 sectors closed higher, led by health care (+1.22%), while energy lagged behind, falling 0.84%.


Bond Yields Spike as Tariffs Fuel Inflation Fears

  • U.S. producer prices stayed flat in June, indicating wholesale costs remained steady month-over-month. At first glance, this might suggest that Trump’s tariffs aren’t impacting the economy as severely as feared, contrasting with the recent uptick in consumer inflation (CPI). However, the Producer Price Index (PPI) measures prices from U.S.-based manufacturers and excludes imports, since imported goods aren’t produced domestically, as the Bureau of Labor Statistics explains.
  • This limits the PPI’s ability to reflect the impact of tariffs on imported products. In contrast, the CPI encompasses both domestic and imported goods, with imports accounting for a significant share in categories such as apparel and new cars. June’s CPI showed apparel prices rising 0.4%, even as new car prices dipped, hinting that tariffs may be starting to filter through in certain sectors. The full impact of the tariffs may not be visible until after August 1, when the next round of tariff increases takes effect, assuming Trump sticks to his deadline.


Stocks on the move:

  • United Airlines (UAL): Shares dipped almost 2% after the airline reported Q2 revenue of $15.24 billion, falling short of the $15.35 billion forecast by analysts at LSEG. Still, earnings exceeded estimates, coming in at $3.87 per share versus the expected $3.81.
  • Sarepta Therapeutics (SRPT): The biotech stock surged 32% following the announcement of a “strategic restructuring” plan, which includes cutting approximately 500 jobs (36% of its workforce) in an effort to save about $400 million annually.
  • Monarch Casino & Resort (MCRI): Shares jumped 14% after the casino group posted Q2 earnings of $1.44 per share, marking a 21% increase from last year. Revenue rose nearly 7% to $136.9 million.
  • Alcoa (AA): The aluminum giant climbed almost 2% after delivering Q2 adjusted earnings of 39 cents per share on $3.02 billion in revenue, topping analyst forecasts of 31 cents per share and $2.90 billion in revenue.



Watchlist: SRPT, UAL, AA, TSM, GE, ABT, CTAS, NVDA, COIN


Today’s action

  • Asia-Pacific markets mostly advanced on Thursday as investors weighed Japan’s second straight monthly export decline and President Trump’s denial of plans to fire Fed Chair Jerome Powell. However, Trump reiterated that a 25% tariff will apply to Japanese imports, noting he doesn’t expect a broader trade deal with Japan. Regionally, the Hang Seng Index gained 0.26%, while China’s CSI 300  edged up 0.16%.
  • In the U.S., stock futures slipped early Thursday after Wednesday’s modest rally. Dow futures dropped 68 points (0.15%), while S&P 500 futures and Nasdaq 100 futures both eased about 0.2%. Traders now await weekly jobless claims, June’s retail sales data, and the latest export/import price indexes for fresh market direction.


Bitcoin

  • Bitcoin (BTC) reclaimed the $119K level on Wednesday after President Trump dismissed rumors about firing Fed Chair Powell, easing market tensions. Despite the rebound, 24-hour trading volume dropped 22.42% to $71.07 billion, while BTC’s market cap rose 2.23%, reaching $2.38 trillion, per CoinMarketCap. BTC dominance slipped to 63.42%, down from 64.05% the previous day.
  • Meanwhile, total BTC futures open interest increased 2.27% to $87.63 billion, reflecting growing leveraged bets. In Washington, the U.S. House narrowly advanced landmark crypto legislation on Wednesday, pushing forward a stablecoin regulatory framework and broader market structure rules, following a closely contested procedural vote.
    Watchlist: BTC: 99,000–123,000 | ETH: 2,000–3,100 | SOL: 140–220

 

Forex

  • The Japanese Yen (JPY) remains under pressure after Japan’s trade surplus missed forecasts, reinforcing expectations that the Bank of Japan (BoJ) will delay any rate hikes. A stronger US Dollar (USD) and upbeat market sentiment continue to support USD/JPY, capping yen recoveries.
  • Meanwhile, EUR/USD slips near 1.1620 as traders await Eurozone inflation data (HICP), with the dollar gaining strength on bets the Fed will keep rates steady. Focus is also turning to today’s US Retail Sales report.
    Watchlist: EUR/USD: 1.1000–1.1850 | USD/JPY: 140–162

 

Basic Materials

  • WTI crude oil trades slightly higher near $65.50 in early Thursday trading, rebounding after a three-day slide as U.S. crude inventories fell by 3.859 million barrels, according to the EIA. However, concerns that Trump’s tariff policies could dent demand are likely to cap further gains.
  • Meanwhile, gold (XAU/USD) faces renewed selling pressure, holding near intraday lows above the weekly bottom. A stronger US Dollar, driven by reduced bets on Fed rate cuts and positive risk sentiment, is weighing on the metal. Persistent trade uncertainties could help limit gold’s downside as traders monitor further developments.
    Watchlist: Gold: 2,600–3,500 | US Oil: 55.60–75.80


Economic Calendar (EST):

08:30 am: USD Core Retail Sales, Retail Sales
08:30 am: USD Philly Fed Manufacturing Index
08:30 am: USD Import Prices
10:00 am: USD Business Inventories
10:00 am: USD NAHB Housing Index
10:00 am: USD FOMC Member Kugler Speaks
12:45 pm: USD FOMC Member Daly Speaks


 

Earnings:

BMO (Before Market Open)
TSM              Taiwan Semic.
GE                 GE Aerospace
NVS               Novartis A.G.
PEP               Pepsico Inc.
MMC              Marsh & McLennan

AMC (After Market Close): NFLX, IBKR, WAL


The TEFS Analyst team wishes you a successful day!