Dollar trades lower as Trump’s move to fire Fed governor spooks investors

NEW YORK – The dollar fell against major currencies on Tuesday as President Donald Trump’s unprecedented move to fire Federal Reserve Governor Lisa Cook renewed concerns over the central bank’s independence.

The euro rose 0.22% against the dollar to USD 1.1647 while sterling was last up 0.2% at USD 1.3481. Against the Japanese yen, the dollar fell 0.27% to 147.36 yen, and it slipped 0.28% against the Swiss franc to 0.8032.

The dollar index, which measures the greenback against a basket of currencies, was down 0.28% at 98.19.

Trump said he was removing Cook over alleged improprieties in obtaining mortgage loans, a step that could test the boundaries of presidential power over the Fed. In response, Cook said Trump has no authority to fire her from the central bank, and she will not resign.

Trump’s announcement surprised markets, but the reaction was relatively muted, with investors caught between concerns over the politicization of policy and the move’s potential payoffs for markets.

“(I)nvestor movement remained relatively muted as attention stayed focused on the repercussions of Jackson Hole and overnight news highlighting an elevated threat to Fed Governor Cook and, more broadly, to Fed independence,” said Uto Shinohara, senior investment strategist at Mesirow Currency Management.

The unpredictable actions of the Trump administration and the prospect of a more dovish Fed have kept the dollar in check, he added.

The market was also little changed after data showed US-manufactured capital goods rose more than expected last month, while consumer confidence slipped slightly in August.

The US president has repeatedly berated Fed Chair Jerome Powell for not lowering interest rates, although he has stopped issuing threats to fire him ahead of the end of his term in a little under nine months.

Traders are currently pricing in an 85% probability of a rate cut at the Fed’s September meeting, according to CME’s FedWatch Tool.

Morgan Stanley on Tuesday became the latest brokerage to forecast a cut in interest rates in September, joining global peers after Powell hinted at policy-easing next month in a speech last week.

“Monetary easing expectations are holding firm across the front end of the curve after the Conference Board’s latest measure of consumer confidence showed households becoming more concerned about employment and income prospects even as they turned slightly more optimistic on the business environment,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

“With the Fed’s reaction function shifting away from inflation and toward an emphasis on labor market conditions, these numbers should help ratify market pricing for at least two rate cuts this year, and add to the factors weighing on the dollar.”

While investors may be inclined to sell the dollar, lingering economic and fiscal worries in Europe also narrow the available currencies for bets on a decline in the US currency, said Kenneth Broux, head of corporate FX and rates research at Societe Generale.

France’s government bonds fell on Tuesday as the country’s minority government looked increasingly likely to be ousted next month.

The 10-year government bond yield rose to a peak of 3.53%, its highest since March and adding to Monday’s 7 basis point climb. Bond yields move inversely to prices.

Worries over renewed political instability in France added to jitters in global bond markets about the independence of the US Federal Reserve, which contributed to selling in government bonds from the US, Britain and Japan.

In cryptocurrencies, bitcoin rose 1.03% to USD 110,796.68, attempting to break a three-day losing streak, while ether climbed 4.37% to USD 4,548.71.

(Reporting by Jaspreet Kalra and Laura Matthews; Editing by Kirsten Donovan, Chizu Nomiyama, Ros Russell, and Edmund Klamann)

Oil falls 2% from nearly three-week high; focus on tariffs, Russian supply

NEW YORK – Oil prices fell 2% on Tuesday, erasing gains from the previous session, as investors watched developments around US tariffs, the war in Ukraine, and the potential disruption of Russian fuel supplies.

Brent crude was down USD 1.58, or 2.3%, at USD 67.22 a barrel, a day after hitting its highest price since early August. West Texas Intermediate (WTI) crude lost USD 1.55, or about 2.4%, to USD 63.25.

“Given the huge amount of uncertainties in the oil market caused by the Ukrainian conflict and the tariff war, investors will remain unwilling to commit themselves to either direction on a prolonged basis,” said Tamas Varga, an analyst with PVM Oil Associates.

Brent prices could be bound to a trading range of USD 65-USD 74 for the foreseeable future, he added.

Oil’s rally on Monday was primarily driven by supply risks after Ukraine strikes on Russian energy infrastructure and the possibility of further US sanctions on Russian oil.

Ukraine’s attacks in response to Russia’s advances in the conflict and its pounding of Ukrainian gas and power facilities have disrupted Moscow’s oil processing and exports and created gasoline shortages in some parts of Russia.

Russia has revised up its crude oil export plan from western ports by 200,000 barrels per day in August from the initial schedule after Ukrainian drone attacks disrupted refinery operations and freed up more crude for shipment, three people familiar with the matter said.

US President Donald Trump has renewed his threat to impose sanctions on Russia if there is no progress towards a peace deal in the next two weeks.

However, sources have told Reuters that US and Russian government officials discussed several energy deals on the sidelines of this month’s negotiations to seek peace in Ukraine.

Meanwhile, Indian exports could face US duties of up to 50% – among the highest imposed by Washington.

“Front and center in this week’s trade is the possibility that US tariffs on India could be doubled to 50% as early as tomorrow … further restricting Russian export flows that are already being inhibited by recent Ukrainian attacks on Russian oil refineries,” analysts at energy advisory firm Ritterbusch and Associates said in a note.

(Reporting by Stephanie Kelly in New York, Seher Dareen in London, Anjana Anil in Bengaluru, and Emily Chow in Singapore; Editing by David Gregorio, Paul Simao, and Nia Williams)

Yield curve steepens as Trump attempts to fire Fed’s Cook

NEW YORK – The US Treasury yield curve steepened on Tuesday as President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook raised concerns about the US central bank’s independence and the prospect of a potentially more dovish composition of Fed policymakers.

Trump on Monday fired Cook over claims of mortgage borrowing impropriety. A lawyer for Cook on Tuesday said she will file a lawsuit to prevent the firing.

Shorter-dated yields fell more than longer-dated ones, causing the yield curve to steepen.

The expectations of a potentially more dovish Fed helped to send shorter-dated yields lower. But a politically influenced Fed that keeps interest rates lower than they otherwise might could increase concerns over rising inflation and reduce foreign demand for the debt on credibility fears. Those factors will weigh on longer-dated debt.

“It doesn’t necessarily mean that you’re going to have lower borrowing costs in the real economy,” said Zachary Griffiths, head of investment-grade and macro strategy at CreditSights in Charlotte, North Carolina. “We have several instances and examples of what could be extrapolated to be a longer-run trend of a steeper curve across Treasuries if Fed independence is in fact impacted.”

Trump has repeatedly criticized Fed Chair Jerome Powell for being too slow to cut rates, and he is expected to replace Powell with a more dovish appointment when his term as Fed chair ends in May.

Powell could, however, stay on as a Fed governor, which would limit the number of appointments Trump can make to the central bank.

The 2-year note yield, which typically moves in step with interest rate expectations, was last down 4.9 basis points on the day at 3.681%.

The yield on benchmark US 10-year notes fell 1.7 basis points to 4.258%.

The yield curve between two-year and 10-year notes was last at 58 basis points, and earlier reached 59.8 basis points, the steepest level since July 16.

Traders have been ramping up bets that the Fed will cut rates at its September 16-17 meeting, following more dovish commentary from Powell on Friday than was expected.

Any potential rate cut may depend on jobs and inflation data for August that is due before the September meeting.

Griffiths said the jobs market appears weaker than it was in September 2024, when the Fed cut rates by a larger-than-normal 50 basis points.

“When we think about the balance of risks and what we’ve learned about the labor market, I think the Fed can probably justify at least a couple of rate cuts from where we are today,” he said.

Traders are currently pricing in 85% odds of a September cut, according to the CME Group’s FedWatch Tool.

Data on Tuesday showed that new orders for key US-manufactured capital goods increased more than expected in July, suggesting business spending on equipment got off to a
strong start in the third quarter, but consumers’ deteriorating assessment of the labor market cast a pall over the economy.

Richmond Fed President Tom Barkin said his forecast is for a modest adjustment in interest rates given that he expects little variation in economic activity over the remainder of the year.

The Treasury Department saw strong demand for a USD 69 billion sale of two-year notes on Tuesday, the first sale of USD 183 billion in short- and intermediate-dated supply this week.

The notes sold at a high yield of 3.641%, around one and a half basis points below where they had traded before the auction. Demand was 2.69 times the amount of debt on offer, the best ratio since December.

The government will also auction USD 70 billion in five-year notes on Wednesday and USD 44 billion in seven-year notes on Thursday.

(Reporting by Karen Brettell; Editing by Andrea Ricci and Leslie Adler)

S&P 500 ends higher after Trump attacks Fed; Nvidia climbs

The S&P 500 ended higher on Tuesday, lifted by Nvidia and Eli Lilly, while US President Donald Trump’s decision to fire a central bank governor deepened concerns about the Federal Reserve’s independence.

Nvidia rose 1.1% ahead of its quarterly report late on Wednesday, which will show how the world’s most valuable company is faring in the crossfire of Washington and Beijing’s ongoing trade war. The chipmaker’s report could also fuel – or dampen – Wall Street’s rally in AI-related stocks.

Trump late on Monday said he was removing Fed Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, adding to concerns about the central bank’s independence from politics. S&P 500 futures briefly sank before the stock market recovered as investors focused on unchanged expectations that the central bank will begin cutting interest rates in September.

“The financial market community is increasingly concerned about that independence. That is a real concern over the long run. But over the short run, how much does it change the trajectory of interest rate policy in the next six to 12 months? I think the writing has already been on the wall that we get easier monetary policy in the next six to 12 months,” said Bill Merz, head of Capital Market Research at US Bank Wealth Management, Minneapolis.

Despite lingering inflation pressures, traders have been pricing in a 25-basis-point interest rate cut for the Fed’s September policy meeting, encouraged by dovish signals from Fed Chair Jerome Powell, data pointing to labor market weakness and a shakeup at the central bank.

Morgan Stanley became the latest brokerage to forecast an interest-rate cut in September, but key upcoming inflation and jobs reports could prompt investors to reassess expectations.

Eli Lilly jumped almost 6% after the drugmaker said its experimental pill cuts body weight by 10.5% in diabetes patients.

The S&P 500 is trading at about 23 times expected earnings, a four-year high, heightening the risk of a selloff if Nvidia’s results dent Wall Street’s enthusiasm for AI-related stocks.

The S&P 500 climbed 0.41% to end the session at 6,465.94 points, just short of its August 14 record-high close.

The Nasdaq gained 0.44% to 21,544.27 points, while the Dow Jones Industrial Average rose 0.30% to 45,418.07 points.

Seven of the 11 S&P 500 sector indexes rose, led by industrials, up 1.03%, followed by a 0.76% gain in financials.

Advanced Micro Devices gained 2% after Truist Securities upgraded the chip stock to “buy” from “hold.”

EchoStar surged 70% to a record high after telecom giant AT&T said it has agreed to buy certain wireless spectrum licenses from the satellite communications firm for about USD 23 billion.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.1-to-one ratio.

The S&P 500 posted 21 new highs and 2 new lows; the Nasdaq recorded 120 new highs and 59 new lows.

Volume on US exchanges was relatively light, with 15.7 billion shares traded, compared with an average of 16.9 billion shares over the previous 20 sessions.

(Reporting by Johann M Cherian and Sanchayaita Roy in Bengaluru, and by Noel Randewich in San Francisco; Editing by Devika Syamnath and Matthew Lewis)

Global equities retreat, as oil and dollar advance

NEW YORK/PARIS – Global equities fell on Thursday on investor jitters around the Federal Reserve’s three-day annual Jackson Hole symposium, as gold prices eased under pressure from a stronger US dollar.

The symposium started on Thursday, with traders awaiting Fed Chair Jerome Powell’s speech on Friday for hints about the likelihood of a September US rate cut.

“Jitters over what’s going to transpire tomorrow at Jackson Hole are certainly weighing on risk appetite a little bit with chair Powell’s speech,” said Adam Turnquist, chief technical strategist for LPL Financial.

On Wall Street, the Dow Jones Industrial Average 0.34% to 44,785.50, the S&P 500 lost 0.40% to 6,370.17 and the Nasdaq Composite retreated 0.34% to 21,100.31.

Big-box retailer Walmart’s quarterly results dampened sentiment.

Traders had ramped up bets for a September cut following a surprisingly weak payrolls report at the start of this month, and were further encouraged after consumer price data showed limited upward pressure from tariffs.

But they lowered their expectations slightly following the release of minutes from the Fed’s July meeting. By Thursday, markets were pricing in a 70.4% chance of a September rate cut, compared to 83% on Wednesday, according to LSEG data IRPR.

The pan-European STOXX 600 closed flat, and major bourses were mixed.

The European Union said it would strive to ensure lower US tariffs apply to its car exports retroactively, as the EU and US detailed commitments made in a deal reached last month.

Analysts attributed a pullback in tech stocks this week to concerns that AI investments were not delivering returns.

Euro zone business activity accelerated in August, PMI data showed, with Germany registering its fastest growth since March and France’s downturn easing.

Stocks had been near recent highs during Asian trading, and Australia’s benchmark hit a new record.

The 10-year US Treasury yield added 3.2 basis points to 4.328%.

The euro was down 0.4% at USD 1.1604.

US President Donald Trump intensified his effort to influence the Fed on Wednesday, calling on Governor Lisa Cook to resign on the basis of allegations made by one of his political allies about mortgages she holds in Michigan and Georgia. Cook said she had “no intention of being bullied to step down” from her position at the central bank.

Deutsche Bank analysts in a research note attributed a rise in gold overnight to renewed concerns about the Fed’s independence.

“The news was a reminder of the lingering concerns over future Fed independence and risks of fiscal dominance, though the extent of the market reaction was fairly modest,” Deutsche Bank said.

State Street Markets’ Tim Graf said that although central bank independence was considered “sacrosanct” by markets, it was not yet problematic.

“Markets quite rightly look through this, price maybe a little bit of risk premium for sure, but it’s not something that I think really upsets the apple cart too much,” he said.

Spot gold prices fell 0.25% to USD 3,338.51. US gold futures settled 0.2% lower at USD 3,386.50.

Elsewhere in commodities, Brent oil futures finished up 1.24% at USD 67.67 per barrel and US crude settled up 1.29% to USD 63.52.

(Reporting by Chris Prentice in New York and Elizabeth Howcroft in Paris; Additional reporting by Johann M Cherian; Editing by Sharon Singleton, Mark Potter, and Sonali Paul)

Oil rises 1% on stalled Russia-Ukraine peace talks, strong US demand

NEW YORK – Oil prices rose by nearly a dollar a barrel on Thursday as Russia and Ukraine blamed each other for a stalled peace process, and as earlier US data showed signs of strong demand in the top oil consuming nation.

Brent crude futures rose 83 cents, or 1.2%, to settle at USD 67.67 a barrel, a two-week high. US West Texas Intermediate crude futures gained 81 cents, or 1.3%, to close at USD 63.52 a barrel.

Both contracts climbed more than 1% in the prior session.

The path to peace in Ukraine remained uncertain, turning oil traders cautious after a selloff over the past two weeks on hopes that US President Donald Trump would soon negotiate a diplomatic end to Russia’s war with its neighbor.

Both Moscow and Kyiv have since blamed each other for stalling the peace process. Russia on Thursday launched a major air attack near Ukraine’s border with the European Union, while Ukraine claimed to have hit a Russian oil refinery.

“Some geopolitical risk premium is slowly being pumped back into the market,” oil trading advisory firm Ritterbusch and Associates told clients on Thursday.

The uncertainty in the peace talks means that the possibility of tighter sanctions on Russia has resurfaced, said Tamas Varga, an analyst at PVM Oil Associates.

Oil prices were also supported by a larger-than-expected drawdown from US crude stockpiles in the last week, indicating strong demand.

US crude stockpiles fell 6 million barrels in the week ended August 15, the US Energy Information Administration reported on Wednesday, while analysts had expected a draw of 1.8 million barrels.

“These tight domestic stockpiles stand in contrast to the oversupply outlook projected by both the IEA and EIA for 2026, challenging traders’ broader market expectations,” StoneX analyst Alex Hodes told clients.

Investors were also looking to the Jackson Hole economic conference in Wyoming for signals on a possible Fed interest rate cut next month. The annual gathering of central bankers begins on Thursday, with Fed Chair Jerome Powell scheduled to speak on Friday.

(Reporting by Shariq Khan, Katya Golubkova, Siyi Liu and Seher Dareen; Editing by Rod Nickel Paul Simao, and Kirsten Donovan)

Dollar gains before key Powell speech at Jackson Hole on Friday

NEW YORK – The dollar gained on Thursday before a highly anticipated speech by Federal Reserve Chair Jerome Powell on Friday will be evaluated for any new clues on whether the US central bank is likely to cut interest rates next month.

Traders ramped up bets on a cut at the Fed’s September 16-17 meeting after an unexpectedly weak jobs report for July. The risk of higher inflation as President Donald Trump’s administration enacts new trade tariffs, however, remains a wild card that is making some policymakers hesitant to ease.

The Fed’s Jackson Hole theme this year is “Labor Markets in Transition,” and “I guess it depends on how much (Powell) wants to lean on cracks in the labor market,” said Eric Theoret, FX strategist at Scotiabank in Toronto.

“Whether it’s the payrolls and the revisions, or whether it’s the claims that continue to climb higher, there is a narrative there that he can definitely push on,” Theoret said.

The dollar briefly pared gains on Thursday after data showed that the number of Americans filing new applications for jobless benefits rose by the most in about three months last week.

It later added to its rally after a separate report showed that US business activity picked up pace in August, led by a resurgent manufacturing sector that featured the strongest growth in orders in 18 months.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.38% on the day at 98.60, with the euro down 0.34% at USD 1.1611.

The Japanese yen weakened 0.65% against the greenback to 148.29 per dollar. Sterling fell 0.27% to USD 1.342.

Economists at Goldman Sachs expect Powell on Friday to modify his comments from the July Fed meeting, when he said that the US central bank is “well positioned” to wait for more information.

“Instead, he might note that the FOMC is well positioned to address risks to both sides of its mandate but emphasize that downside risks to the labor market have grown following the July employment report, while reiterating that tariffs are likely to have only a one-time effect on the price level,” the economists said in a report.

“We do not expect him to decisively signal a September cut, but the speech should make it clear to markets that he is likely to support one,” they added.

Powell is seen as unlikely to clearly signal a rate cut with data for August still due before the September session.

Fed funds futures traders pared expectations for a September cut ahead of Powell’s speech and are now pricing in 74% odds of a September cut, down from 82% on Wednesday, according to the CME Group’s FedWatch Tool. They are also pricing in 49 basis points of cuts by year-end, down from 54 basis points.

Atlanta Fed President Raphael Bostic said on Thursday that he still thinks the US central bank can cut its interest rate target once this year, while noting there is a lot of uncertainty around that view as the economy undergoes considerable change.

Kansas City Fed President Jeffrey Schmid said there seems no rush to cut interest rates, with inflation still above the central bank’s 2% target and the labor market still in solid shape.

Cleveland Fed President Beth Hammack also said that based on where the economy is right now, ongoing issues with inflation mean it is not the time to cut the central bank’s interest rate target.

Meanwhile, the US Justice Department plans to investigate Fed Governor Lisa Cook, with a top official informing Powell of the probe and encouraging him to remove her from the board, Bloomberg News reported on Thursday.

Trump on Wednesday called on Cook to resign, citing allegations made about mortgages she holds in Michigan and Georgia.

In cryptocurrencies, bitcoin fell 1.77% to USD 112,466.

(Reporting by Karen Brettell in New York; Additional reporting by Jaspreet Kalra in Mumbai; Editing by Mark Heinrich and Matthew Lewis)

US yields recede as investors prep for Fed outlook at Jackson Hole event

NEW YORK – US Treasury yields slipped on Tuesday, after those on most maturities rose for three straight days, as investors braced for a key central bank gathering later this week for a sense of whether the Federal Reserve will resume cutting interest rates next month.

Fed Chair Jerome Powell is due to speak on Friday on the economic outlook at the US central bank’s annual symposium in Jackson Hole, Wyoming. Powell had used the conference to take an inflation-fighting stance when it was needed in 2022.

But until then, the bond market is in a holding pattern.

“At this point, everybody’s…in a wait-and-see mode as to what might come out at the end of the week,” said Jim Barnes, director of fixed income, at Bryn Mawr Trust in Berwyn, Pennsylvania.

“What’s interesting is that when we had the drop in yields from the labor market report a couple weeks ago, we have seen some give-back after the inflationary data, mostly with the PPI (producer price index) report from last week, which was much stronger than expected.”

In afternoon trading, US two-year yields, which are tied to the Fed’s monetary policy, slipped 1.7 basis points (bps) to 3.754%.

On the longer end of the curve, the benchmark 10-year yield also fell, down 3.7 bps at 4.302%.

US 30-year yields slipped as well, down 4 bps at 4.902%.

For now, many market participants were generally unsure of what Powell’s stance will be on Friday with respect to the September policy meeting. The Fed chief has been reticent to make a shift in policy outlook from his current hawkish view, citing uncertainty surrounding the impact of tariffs on inflation.

Victoria Fernandez, chief market strategist at Crossmark Global Investments in Houston, in an emailed comment, said a rate cut doesn’t help the labor market and the full employment mandate “if the lack of hiring we are currently experiencing is due to uncertainty over tariffs or labor-saving technologies versus a lack of demand.”

Rate easing, she noted, would provide some insurance against further deterioration in the labor market, “but is not necessarily a ‘fix’ as many believe and could even spur the bond vigilantes to push rates higher.” Bond vigilantes refer to investors who punish bad fiscal policy by governments by selling their debt, making it prohibitively expensive for them to borrow.

Barnes of Bryn Mawr Trust, on the other hand, expects Powell to strike a dovish tone in his speech on Friday even though incoming information has confounded his data-dependent strategy by pulling in both directions. Powell’s colleagues are split on whether higher inflation or higher unemployment is the bigger risk.

In other parts of the bond market, the yield curve flattened slightly, with the gap between two-year and 10-year yields at 54.6 bps, compared with 56.7 late on Monday. On Tuesday, the curve hit its steepest level since mid-July in a bear-steepening move, which was mainly a reflection of higher inflation expectations.

Treasury yields earlier in the session pared their declines after data showed overall housing starts jumped 5.2% to a rate of 1.428 million units on the back of a second month of double-digit increases in apartment projects.

But despite the bigger-than-expected gain in starts, building permits, a proxy for future home construction, fell 2.8% to a 1.35 million annualized rate, a five-year low amid muted builder sentiment.

“Housing starts jumped for the second straight month, thanks to a surge in condos,” wrote Priscilla Thiagamoorthy, senior economist, at BMO Capital Markets. “Even so, we expect residential construction to weigh on economic growth this quarter amid still-elevated interest rates and high material costs.”

In the rate futures market, traders have priced an 85% chance the Fed will cut rates in September, according to the CME’s FedWatch. That probability was at 94% a week earlier. Rate futures have also factored in about 55 bps of easing this year, compared with more than 60 bps a week ago.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Christina Fincher and Andrea Ricci)

S&P 500 seen stalling as AI rally meets tariff jitters

The S&P 500 benchmark US stock index will end 2025 just below current near-record levels, reflecting tempered optimism amid ongoing concerns over the economic impact of President Donald Trump’s global tariffs and uncertainty surrounding Federal Reserve rate cuts, according to a new Reuters poll.

Market strategists polled by Reuters showed that concerns about potential stagnation related to tariffs have dampened optimism about Wall Street’s rally in AI heavyweights.

“I do not anticipate the United States entering a recession; however, I do expect the economy to experience a slowdown,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. “Many employers lack visibility into future conditions and are therefore delaying expansion.”

The S&P 500 will end 2025 at 6,300 points, equivalent to a 2.3% dip from current levels, according to the median estimate of 35 strategists, analysts, and portfolio managers polled August 7-19.

The S&P 500 ended Monday at 6,449.15 points, down 0.3% from its record high close on August 14.

Top of mind for US investors, the Fed is widely expected to cut interest rates at its September policy meeting to support economic growth, possibly followed by another reduction by December.

Some 70% of global investors surveyed by BofA Global Research in early August said they expect stagflation – the combination of below trend growth and above trend inflation – in the next 12 months.

The S&P 500 has climbed 9% so far in 2025.

Strategists’ estimates have increased since a Reuters stock poll in May, when they expected the S&P 500 to end 2025 at 5,900. But this week’s poll forecast is still down from a Reuters poll in February, when they targeted the S&P 500 to end the year at 6,500.

While strategists struggle to predict the stock market, the latest Reuters poll offers a valuable glimpse of Wall Street’s cautious sentiment following recent record gains.

A series of deals with major US trading partners, along with extensions of the White House’s self-imposed deadlines, has left investors less jittery about Trump’s on-again off-again global trade war than they were when his April tariff announcements sent global markets into a slump.

The S&P 500 and Nasdaq have climbed to record highs in 2025 in large part due to gains in Microsoft, Nvidia, Meta Platforms, and other AI heavyweights. At the same time, S&P 500 sector indexes, including healthcare, consumer discretionary, energy and real estate, are nearly unchanged for the year.

“AI is a game changer for these companies, and they are being allowed to grow without any government interference,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “It’s a revolution that’s going to continue for some time.”

Second-quarter financial reports on Wall Street have been stronger than expected, with S&P 500 companies on track for a 12.9% year-over-year increase in earnings, according to LSEG.

That compares to expectations of under 6% earnings growth at the start of July. Strong results from the major AI-related players are responsible for much of that increase in second-quarter earnings.

The S&P 500 is now trading at 23 times expected earnings, near its PE high in four years and well above its five-year average PE of 19, according to LSEG.

(Polling by Aman Kumar Soni and Shaloo Shrivastava; Reporting and writing by Noel Randewich; Additional reporting by Chuck Mikolajczak, Stephen Culp, Sinead Carew, Chibuike Oguh, and Caroline Valetkevitch; Editing by David Gregorio)

Dollar mixed as traders wait on Jackson Hole

NEW YORK – The dollar was mixed on Tuesday as traders awaited the Federal Reserve’s Jackson Hole Economic Policy Symposium later this week for further clues on US interest rate policy.

A speech on Friday by Fed Chair Jerome Powell is this week’s main focus, with little major economic data to drive market direction. Traders are tuned into whether Powell will push back against market pricing of a rate cut in September.

Traders ramped up bets on a rate cut at the Fed’s September 16-17 meeting after a weak July jobs report, and as last month’s consumer price inflation report showed limited upward pressure from tariffs.

But a hotter-than-expected July producer price reading has tempered some rate-cut expectations. Powell has said he is reluctant to cut rates due to an expected increase in inflation this summer from tariffs.

“Last week, when we had about 25 basis points priced in for September, and more than two cuts for the rest of the year, there was probably some risk that the Powell speech would disappoint those expectations if he wasn’t clear enough in committing to a September cut,” said Vassili Serebriakov, an FX and macro strategist at UBS in New York.

“Now that we’re pricing in about 20 basis points for September and just slightly over 50 basis points for the rest of the year, I think the risks are much more balanced,” Serebriakov added.

Traders are pricing in 54 basis points of cuts by year-end.

The Fed will also release minutes from its July 29-30 meeting on Wednesday, though they may offer limited insight as the meeting came before July’s weak jobs report.

Data on Tuesday showed groundbreaking for new US single-family homes and permits for future construction rose in July even as high mortgage rates and economic uncertainty continued to hamper home purchases.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.15% on the day at 98.27, with the euro down 0.12% at USD 1.1646.

Against the Japanese yen, the dollar weakened 0.22% to 147.54.

Currency moves have been relatively muted for the past few weeks following a steep drop in the dollar in the first half of the year.

“There’s been a bit of de-risking in FX over the summer, and now investors are just waiting for the more clear catalyst for the next move,” said Serebriakov.

In other currencies, sterling slipped 0.16% to USD 1.348. The Aussie dropped 0.62% to USD 0.6451, the weakest since August 5.

Traders are also focused on any developments in peace talks to end the Russia-Ukraine war.

US President Donald Trump said on Tuesday he hoped Russian President Vladimir Putin would move forward on ending the war in Ukraine, but conceded that the Kremlin leader may not want to make a deal at all, adding this would create a “rough situation” for Putin.

In cryptocurrencies, Bitcoin fell 2.88% to USD 113,112.

(Reporting by Karen Brettell; Additional reporting by Jaspreet Kalra; Editing by Sharon Singleton and Richard Chang)

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