Fed chair Powell says no Trump pressure to lowering interest rates
President Donald Trump has put pressure on the Federal Reserve to lower interest rates and Jerome Powell is still saying no.
U.S. stocks ended lower on Aug. 19, with the blue-chip Dow reaching a record high early with help from home improvement retailer Home Depot and more economists saying they don’t expect Federal Reserve Chair Jerome Powell to signal any imminent rate cuts.
Home Depot missed quarterly results estimates but stuck to its full-year outlook. The retailer said it has not raised prices due to tariffs and has no plans to do so.
Discount giants Target and home improvement company Lowe’s are slated to report before the open on Aug. 20, and Walmart the next morning. Large retailer earnings can provide a window into how tariffs are affecting companies and consumer spending.
The Dow closed up 0.02%, or 10.45 points, to 44,922.27 after touching a fresh all-time high of 45,207.39; the broad S&P 500 slipped 0.59%, or 37.78 points, to 6,411.37; and the tech-laden Nasdaq fell 1.46%, or 314.822 points, to 21,314.952. The benchmark 10-year Treasury yield dipped to 4.306%.
Hower, the main event will be Powell‘s speech at the end of the week at the annual Jackson Hole Economic Symposium of global central bankers and finance chiefs. Investors will be looking for hints Powell may be done waiting to see tariff effects before cutting rates again.
The CME FedWatch tool that shows the likelihood that the Fed will change rates at each policy meeting based on market trading suggests a nearly 85% chance of the Fed easing rates in September. However, economists doubt Powell will give a clear sign he is willing to lower rates soon.
“While Powell is likely to signal greater openness to cutting rates in the near-term through his discussion of the labor market, he is unlikely to lock in a rate cut in September,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank. “Our sense from Fed speakers so far is that there is not yet broad-based support for such an action, and Powell is likely to gain little by pushing the market further towards a September cut.”
Before Powell’s speech, investors will get a glimpse midweek of the dissents at the last Fed meeting. Fed governors Christopher Waller and Michelle Bowman voted against the central bank’s decision to keep rates unchanged between 4.25%-4.50% last month. It was the first time since 1993 that two governors dissented.
Investors mostly shrugged off an unexpected jump in housing starts in July. Year-over-year, starts grew 12.9%, the fastest growth since December 2023.
Corporate news
- Viking Therapeutics’ midstage trial data on its obesity pill showed a high dropout rate. Shares plunged 42.12%.
- Nvidia is developing a new chip for China that’s expected to be more powerful than the H20 chip it’s selling in China now, according to a Reuters report, citing two people briefed on the matter. Shares fell 3.5%.
- Power and natural gas utilities Black Hills Corp. and NorthWestern Energy Group agreed to merge in a $3.6 billion deal. Black Hills stock rose less than 1% and NorthWestern shares gained 6.34%.
- Home Depot’s second-quarter results just missed forecasts. However, the retailer held on to its full-year outlook and said it doesn’t plan to raise prices across stores due to tariffs. Shares rose 3.19%.
- Fabrinet topped estimates in the last three months of its fiscal year and issued a strong outlook for the first three months of the fiscal year. Shares lost 12.68%.
- Medtronic topped analysts’ forecasts in the first three months of its fiscal year and raised its annual forecast. It also named some new directors after Elliott Investment Management became a major shareholder, the Wall Street Journal said. Medtronic stock fell 3.14%.
- Best Buy launched a third-party sellers site of different products and brands, including more tech-related accessories like custom video game controllers and some non-tech items including seasonal decor and sports collectibles. Shares added 3.26%.
- Palo Alto Networks topped estimates in the last three months of its fiscal year. Its guidance for the first three months of its fiscal year and for the full year also topped expectations. Founder Nir Zuk also is retiring as chief technology officer. Shares gained 3.06%.
- Intel is getting a $2 billion investment from Softbank. The Japanese investment firm is buying around 87 million shares, or roughly 2% of Intel’s outstanding shares, at $23 apiece. This comes on the heels of reports the Intel stock rose to the highest level since February and closed up 6.97%.
- Tegna agreed to sell itself to Nexstar Media Group for $6.2 billion. Tegna shares added 4.39%.
Cryptocurrency
Crypto firm Tether hired former White House crypto policy executive Bo Hines as a strategic adviser to help steer its expansion in the United States.
Separately, Thailand said it would allow tourists to convert their crypto into Thai bhat to spend on their trip. Tourists must go through licensed digital-asset business operators and e-money service providers, according to a Finance Ministry statement. They are also limited to 500,000 baht per month.
Bitcoin was last down 2.58% at $113,283.80.
This story was updated with new information.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
