U.S. markets posted a mixed performance Tuesday after June’s inflation report offered little surprise. The Nasdaq extended gains while the Dow and S&P 500 pulled back. Treasury Secretary Scott Bessent confirmed a formal process has begun to replace Federal Reserve Chair Jerome Powell when his term ends in May, and reassured investors about the upcoming tariff pause deadline with China. Leading tech names helped buoy the Nasdaq, with notable gains from Nvidia and Apple.
Markets React Calmly to Inflation, Shift Focus to Leadership and Trade
U.S. stock indexes diverged Tuesday as investors weighed new inflation data alongside forward-looking policy developments. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index rose 0.3% in June, bringing the annual inflation rate to 2.7%. The data aligned with forecasts and gave markets some breathing room.
The Dow Jones Industrial Average declined by 0.9%, while the S&P 500 slipped 0.2%. In contrast, the Nasdaq Composite edged up 0.4%, notching continued gains following Monday’s record close. Trading volume increased on both the Nasdaq and the New York Stock Exchange. However, decliners outpaced advancers by a wide margin on both platforms—more than 3-to-1 on the NYSE and 2-to-1 on the Nasdaq.
The small-cap Russell 2000 index underperformed, falling 1.2%. Bond markets also reflected investor caution, with the 10-year Treasury yield rising to 4.48%.
Bessent Confirms Fed Transition Plans
In a televised interview with Bloomberg Television, Treasury Secretary Scott Bessent confirmed that a formal process is underway to identify a successor to Federal Reserve Chair Jerome Powell, whose current term ends in May 2026. While Bessent did not signal a crisis, the comment underscored that leadership changes at the Fed are now an active policy consideration.
Addressing trade, Bessent reassured investors that the upcoming Aug. 12 deadline marking the end of the 90-day tariff pause with China should not be cause for concern. “We’re in a very good place,” he said, noting that trade talks between the two countries are progressing positively.
During JPMorgan Chase’s second-quarter earnings call, Jamie Dimon, the bank’s CEO, emphasized that “the independence of the Federal Reserve is incredibly important.” According to Bloomberg, Dimon added that markets and the broader economy function best when monetary policy decisions remain free from political pressure.
Bill Adams, Chief Economist at Comerica Bank, noted in a July 15 research brief that with core inflation hovering near the Federal Reserve’s comfort range, the central bank may take a wait-and-see approach. As quoted by Comerica Economics, Adams said the Fed has room to “observe the impact of potential tariff adjustments on consumer spending and business costs before acting on interest rates.”
Tech Stocks Lead While Small Caps Falter
Market leadership came once again from tech giants. Nvidia (NVDA) rose more than 4%, while Amazon (AMZN) surpassed a technical buy point of 214.84. Microsoft (MSFT) gained nearly 1% on the day.
Apple (AAPL) advanced 1% after reports emerged that the company plans to invest $500 million in rare earth minerals producer MP Materials (MP), whose stock skyrocketed 26% following the news.
Among breakout names, The Bancorp (TBBK) cleared a buy point of 65.84 from a cup base, supported by strong relative strength. Full Truck Alliance (YMM), a Chinese logistics software firm, approached a buy point of 12.96, while Cal-Maine Foods (CALM) tested a 104.49 entry level from a similar technical pattern.
Looking Ahead
Although inflation remains largely stable, investor attention is clearly shifting to structural economic questions—including leadership at the Fed and the outlook for U.S.-China trade relations. With earnings season intensifying and August tariff deadlines looming, markets are likely to remain sensitive to policy signals in the coming weeks.
(With reporting from Bloomberg, JPMorgan, and Comerica Bank)
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