Trump confusion in global markets

President Trump's pressure on US Federal Reserve (Fed) Chairman Jerome Powell to lower interest rates since taking office has continued to raise concerns that the bank will not be able to take the necessary steps to combat inflation.

This situation also leads to continued uncertainty surrounding the Fed's independence. Trump's tariffs, combined with these uncertainties, are fueling concerns that inflationary pressures could intensify further.

"I WON'T FIRE POWELL"

While there are reports in the US press that Trump told some Republicans in the House of Representatives that he would dismiss US Federal Reserve (Fed) Chair Jerome Powell, Trump stated that he has no plans to fire Powell.

Trump said Powell was late in cutting interest rates, hence his nickname "too late." Trump stated that he hadn't dismissed the idea of firing Powell, saying, "But I think it's very unlikely unless he has to leave because of fraud."

Pointing out that he spoke with some Republicans about the concept of firing Powell, Trump said he asked, "What do you think?" and received the response from almost all of them that he should fire Powell.

Analysts said such a move could help markets achieve the low interest rates they want, but it also risks the Fed failing to take the necessary steps to keep inflation under control.

In macroeconomic data, the US Producer Price Index (PPI) remained unchanged month-over-month in June but rose 2.3% year-over-year, below expectations. Annual producer inflation reached its lowest level since September last year.

Core PPI, which excludes variable food and energy prices, remained unchanged on a monthly basis in June and increased by 2.6 percent on an annual basis.

Industrial production in the US increased by 0.3 percent in June compared to the previous month. The country's capacity utilization rate increased by 0.1 percentage points to 77.6 percent.

On the other hand, the "Beige Book" report, which includes assessments of the current situation in the American economy, revealed that economic uncertainty causes caution.

The report noted that economic activity increased slightly from the end of May to the beginning of July, adding, "The continued high level of uncertainty contributed to businesses continuing to act cautiously."

The report noted that cost pressures are expected to remain high in the coming months, increasing the likelihood that consumer prices will begin to rise more rapidly from the end of the summer.

As the country's major banks continued to announce second-quarter financial results, Bank of America's net profit increased by 3 percent in the April-June period, Morgan Stanley's net profit increased by 15 percent and Goldman Sachs' net profit increased by 22 percent.

Despite reporting better-than-expected results, Bank of America and Morgan Stanley fell 0.3 percent and 1.3 percent, respectively, while Goldman Sachs rose 1 percent.

Shares of Johnson & Johnson, whose profit beat expectations, also rose more than 6 percent.

The Producer Price Index (PPI) data released in the country highlighted predictions that inflationary pressures may not be as strong as feared, supporting expectations that the Fed may begin cutting interest rates this year.

Analysts said risk appetite increased on the New York Stock Exchange after data released supported expectations that the Fed could begin interest rate cuts, banks' balance sheets came in better than expected and Trump said he had no plans to fire Powell.

Trump said he would send letters to more than 150 countries informing them that tariff rates could be 10 percent or 15 percent.

Following these developments, the Dow Jones Industrial Average rose 0.53 percent, the S&P 500 Index rose 0.32 percent, and the Nasdaq Index rose 0.26 percent yesterday on the New York Stock Exchange. Index futures contracts in the US opened the day lower.

The dollar index, which fell to 97.7 yesterday following news that Powell would be dismissed, rose to 98.4 today.

The US 10-year bond yield, which fell to 4.43 percent after rising to 4.49 percent yesterday, rose to 4.4760 percent today as inflation concerns continued.

The price of an ounce of gold fell 0.2 percent to $3,338, while the price of a barrel of Brent crude oil is at $68.1, just above the previous close.

European stock markets fell

European stock markets followed a negative trend yesterday.

According to regional data released yesterday, inflation in the UK exceeded expectations at 0.3 percent monthly and 3.6 percent annually. The country's inflation figures for May were 0.2 percent monthly and 3.4 percent annually.

Meanwhile, Dutch chip manufacturing technologies firm ASML saw its revenue increase by 15 percent to 7.7 billion euros in the second quarter of this year compared to the same period in 2024. The company's net profit, which was 1.57 billion euros in the second quarter of the previous year, reached 2.29 billion euros in the second quarter of 2025.

The German Central Bank (Bundesbank) stated that the economy lost momentum in the second quarter due to the impact of the US tariff policy.

Yesterday, the CAC 40 index in France fell 0.57 percent, the DAX 40 index in Germany fell 0.21 percent, the FTSE 100 index in the UK fell 0.13 percent, and the FTSE MIB 30 index in Italy fell 0.40 percent. Index futures contracts in Europe opened the day higher.

POSITIVE TREND IN ASIAN STOCK MARKETS

Despite a positive trend in Asian stock markets, increases remain limited due to continuing uncertainties regarding US trade policies.

According to regional data, Japan's exports decreased by 0.5 percent month-on-month in June. The country's exports also decreased by 1.7 percent in May.

Analysts said Japan's failure to reach a trade agreement with the United States, coupled with poor export data, has increased concerns about a recession in the country.

Meanwhile, shares of Seven & i, a Japanese retailer, fell more than 72 percent after Canada's Alimentation Couche-Tard withdrew its $47 billion takeover bid.

With these developments, the Nikkei 225 index in Japan rose 0.2 percent, the Hang Seng index in Hong Kong rose 0.2 percent, the Kospi index in South Korea rose 0.5 percent and the Shanghai Composite index in China rose 0.1 percent near the close.

Following a sales-heavy trend yesterday, the BIST 100 index in Borsa Istanbul closed the day at 10,121.52 points, losing 1.02 percent.

The August futures contract based on the BIST 30 index on the Borsa Istanbul Futures and Options Market (VIOP) was traded at 11,831.00 points in yesterday evening's session, 0.3 percent above the normal session close.

USD/TRY closed at 40.2548 yesterday, with a 0.1 percent increase, and is trading flat at 40.2640 today at the opening of the interbank market.

Analysts said that a busy data agenda will be followed today, with short-term external debt statistics, housing price index and housing sales figures in the country, and the Eurozone Consumer Price Index (CPI) and retail sales data to be released in the US.

Analysts stated that news flow regarding tariffs and geopolitical developments will have an impact on the direction of the index, and noted that from a technical perspective, the 10,000 and 9,900 levels in the BIST 100 index are support levels, while 10,200 and 10,300 points are resistance levels.

Here are the data to follow in the markets today:

10.00 Türkiye's short-term external debt statistics for May

10.00 Türkiye, June housing price index

10.00 Türkiye, June housing sales

12.00 Eurozone, June Consumer Price Index (CPI)

3:30 PM US retail sales for June

3:30 PM US weekly jobless claims

15.30 US, July Philadelphia Fed manufacturing index