U.S. Treasury yields reportedly edged higher Tuesday morning after Treasury Secretary Scott Bessent formally launched the process to select a new chair of the Federal Reserve, setting the stage for what could become one of the most consequential monetary appointments of President Trump’s second term.
While the long-awaited June inflation data aligned with expectations—rising 2.7% annually—investors were left parsing mixed signals across the markets.
The consumer price index figures are unlikely to influence the Federal Reserve’s current course on interest rates, despite repeated calls from the White House to loosen monetary policy.
“The Fed continues to operate independently,” said one senior financial strategist. “But the selection process for its next leader is now officially underway, and that adds a layer of uncertainty the market has to price in.”
Wall Street responded in kind, with major indexes diverging by late morning. The Dow Jones Industrial Average edged lower while the Nasdaq Composite notched a new intraday high, bolstered by strength in semiconductor stocks.
Nvidia, a bellwether of the sector, surged after revealing that it had received assurances from the Biden administration that it may resume selling its H20 artificial intelligence chips in China.
Bank earnings also dominated the session. JPMorgan Chase and Wells Fargo both posted stronger-than-expected quarterly results, extending their long-running streak of outperforming peers.
Citigroup, long seen as a laggard since its near-collapse during the 2008 financial crisis, climbed toward its highest close in more than 15 years.
Yet not all financial stocks shared in the optimism. BlackRock, the world’s largest asset manager, stunned investors with the revelation of substantial fund outflows, even as it crossed the milestone of managing more than $12 trillion in assets. Its shares dropped 6% in early trading.
Investors, already navigating shifting monetary signals and geopolitical uncertainty, now await further details on both the Fed succession and the Indonesia pact, which could shape markets in the weeks ahead.
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