Crypto Jumps Amid US Bill Hopes; Global Stocks Mixed, Tariffs Loom

The euro edged higher on Wednesday, reclaiming the 1.1600 handle after rebounding from a three-week low of 1.1562.

Market sentiment was jolted after U.S. President Donald Trump hinted at the possible dismissal of Federal Reserve Chair Jerome Powell, criticizing him for acting too slowly on interest rate cuts. Although Trump later denied any immediate plans to remove Powell, his harsh remarks reinforced investor concerns about the Fed's independence and the trajectory of U.S. monetary policy.

On the data front, U.S. Producer Price Index (PPI) figures came in weaker than expected, with June’s headline print rising 2.3% year-over-year, down from 2.6% in May and below the 2.5% forecast. Core PPI, which strips out food and energy, also softened to 2.6% from 3.0%, missing expectations of 2.7%.  Atlanta Fed President Raphael Bostic emphasized that the central bank is guided by data rather than media reports, noting that inflation is still not at target and that a wait-and-see approach is appropriate for now.

The euro’s gains were capped by a lack of economic releases from the Eurozone on Wednesday. Market participants are now focused on June’s Harmonized Index of Consumer Prices (HICP), due ahead of the European Central Bank’s (ECB) policy meeting on July 24.

Diverging opinions among ECB officials have added uncertainty to the policy outlook. While Governing Council members such as Mario Centeno and Fabio Panetta have expressed openness to a rate cut, others, including Isabel Schnabel and Robert Holzmann, support maintaining current rates.

Despite regaining ground, EUR/USD remains vulnerable to broader macroeconomic drivers. With the Fed likely on hold and ECB policymakers divided, the pair may continue to trade within a narrow range until clearer signals emerge from both central banks.

Gold prices climbed to a three-week high on Wednesday, reaching an intraday peak of $3,377 before retreating slightly to end the session at $3,3346. The yellow metal gained 0.46% on the day, buoyed by political noise in the U.S. and softer-than-expected inflation data.

The rally was largely driven by renewed uncertainty surrounding the Federal Reserve’s leadership. U.S. President Donald Trump once again stirred market volatility by suggesting he had considered removing Fed Chair Jerome Powell—a move he later walked back, clarifying that such action would be unlikely unless evidence of fraud emerged. Despite the denial, markets reacted to the initial remarks, pricing in heightened political risk and potential policy instability.

Beyond U.S. political dynamics, a mix of economic data and geopolitical concerns continued to support gold. The U.S. Producer Price Index (PPI) came in below expectations, suggesting easing inflationary pressures at the factory level. On the geopolitical front, fresh Israeli airstrikes on Syria contributed to safe-haven flows into gold, helping limit the metal’s pullback.

Investors will now turn their attention to a series of upcoming U.S. economic releases, including Retail Sales, initial jobless claims, and the University of Michigan Consumer Sentiment Index. Several scheduled speeches from Federal Reserve officials could also influence expectations for future monetary policy and, by extension, gold’s short-term trajectory.

Oil prices ended slightly lower on Wednesday, pressured by an unexpected build in U.S. fuel inventories and growing concerns over the broader economic impact of U.S. trade tariffs. These headwinds offset signs of stronger global demand and geopolitical risks affecting supply.

Weekly data from the U.S. Energy Information Administration (EIA) showed a mixed picture. Crude oil inventories declined by 3.9 million barrels to 422.2 million—well above analysts’ expectations for a modest 552,000-barrel draw. However, gasoline and distillate stockpiles surged, raising concerns about refined product demand during the peak summer season.

Broader concerns about the global economic landscape also weighed on oil prices. The European Commission is reportedly preparing retaliation in case ongoing trade negotiations with the U.S. fail, as tensions escalate around tariffs.

Meanwhile, speculation about Trump possibly removing Federal Reserve Chair Jerome Powell briefly boosted expectations for U.S. interest rate cuts—moves that could eventually support energy demand.

Although Trump later walked back his comments, stating he was not currently planning to fire Powell, he stopped short of ruling out the possibility. Futures markets are now pricing in rate cuts as soon as September, with at least one more likely by year-end.

OPEC’s latest monthly report offered a more optimistic view of the global economy for the second half of the year, citing improving activity in Brazil, China, and India. The report noted continued recovery in the U.S. and the EU following a sluggish 2024.

On the supply side, geopolitical risks resurfaced as drone attacks on oil infrastructure in Iraq’s semi-autonomous Kurdistan region continued for a third consecutive day.

While strong global demand—particularly from Asia—and falling U.S. crude inventories provide some support for oil prices, the recent builds in refined fuel stockpiles and persistent geopolitical uncertainties continue to limit upward momentum.

U.S. stocks closed higher on Wednesday as investor sentiment improved after President Donald Trump denied reports that he was on the verge of firing Federal Reserve Chair Jerome Powell. A softer inflation report also helped temper rate concerns, while solid corporate earnings and renewed trade developments added to the day’s cautious optimism.

Trade policy remained a major theme as the White House pushed forward with its tariff agenda. Trump reiterated his plan to impose 200% tariffs on pharmaceutical imports by month-end if no deal is reached, while also confirming a new 19% tariff on imports from Indonesia under a new bilateral trade agreement.

The Indonesia deal follows preliminary frameworks with the UK, China, and Vietnam, and Trump has hinted at additional agreements in the coming weeks. The administration continues to target an August 1 deadline for its broader “reciprocal” tariff package to take effect, with no plans to delay.

Corporate earnings provided fresh direction for equity markets, with financial heavyweights and tech names reporting mixed, but generally positive, results.

JPMorgan Chase, Citigroup, and Wells Fargo largely beat Q2 expectations on Tuesday, though executives expressed caution over H2 risks, particularly regarding trade policy and fiscal uncertainty.

Bank of America advanced after posting higher second-quarter profits, driven by strong trading revenue amid volatile markets. Goldman Sachs shares gained as the bank reported record equities trading revenue and a surge in dealmaking activity. Morgan Stanley dipped, despite posting profit growth as market volatility supported trading income. Johnson & Johnson rose after raising its full-year sales guidance, though tariff risks remain a potential headwind.

With the Fed’s Beige Book due and more earnings reports ahead, investors are closely watching the evolving balance between inflation data, monetary policy, and trade developments. The path forward for interest rates, combined with corporate guidance and geopolitical risks, will likely drive market direction in the days ahead.