Trump Confirms Powell Stays as Dollar Edges Higher

Donald Trump confirmed he would not remove Fed Chair Jerome Powell following a visit to the central bank, as the dollar rose 0.2% to 147.23 yen after Japan's Tokyo core inflation came in at 2.9% for July. The S&P 500 and Nasdaq futures were up 0.2%, pointing toward another record-setting session, while the Dow slipped 0.7% on Friday. Investors are now looking ahead to central bank meetings and key earnings reports from major US tech firms next week.

Equities

The FTSE 100 closed up 0.9% at a record 9,138.37 on Thursday, lifted by a mix of strong corporate results and renewed optimism over a potential EU-US trade agreement. BT Group led the index with a 10.4% rise after announcing Patricia Cobian as its first female chief financial officer.

Reckitt climbed 9.9% after raising its annual revenue growth forecast, boosting the broader personal care and grocery sector. ITV rose 13.3% following half-year results that beat expectations, while Howden Joinery added 8.9% on the back of higher first-half profits.

Vodafone gained 3.4% after posting a 5.5% increase in organic service revenue in the first quarter. Airtel Africa jumped 7.3% following stronger quarterly earnings. AstraZeneca advanced 2.1% after reporting successful trial results for a drug targeting a rare immune disorder, and GSK rose 1.4% after the US FDA extended its review of a blood cancer treatment.

Mining stocks fell as gold prices dropped, with Fresnillo down 2.1% and Endeavour Mining off by 1.3%. BP slipped 1.7% after confirming its exit from a green hydrogen project in Australia, shifting focus back to oil and gas operations.

In the US, the S&P 500 rose 0.07% to a record close of 6,363.35, while the Nasdaq gained 0.18% to 21,057.96. The Dow Jones Industrial Average fell 0.70% to 44,693.91. Alphabet rose 1% after second-quarter results reassured investors that its AI investments are delivering returns. The upbeat report helped lift shares of other tech majors, with Microsoft, Nvidia and Amazon each rising more than 1%.

Tesla dropped 8.2% after CEO Elon Musk warned of “a few rough quarters” due to reduced government support for electric vehicles. The stock is now down roughly 25% in 2025. IBM fell nearly 8% as investors reacted to weaker-than-expected software sales. UnitedHealth lost 4.8% after disclosing cooperation with a Department of Justice probe into its Medicare operations. Honeywell fell 6.2% despite raising its annual outlook, as investors focused on weaker elements in its results. American Airlines tumbled nearly 10% after warning of a third-quarter loss, citing slow domestic travel demand.

Forex & Commodities

The US dollar steadied on Friday, holding near 97.448 on the dollar index but still heading for a 1% weekly drop—its weakest weekly showing in a month. The fall came as markets looked ahead to next week’s Federal Reserve meeting, where policymakers are expected to keep rates unchanged between 4.25% and 4.50%. Comments from Fed Chair Jerome Powell will be closely watched for signals on future policy. ANZ expects the first rate cut to come in September, with another possible in December.

In Japan, the yen was on course for a weekly gain of nearly 1%, trading around 147.20 against the dollar. The move followed a US–Japan trade deal that reduced auto import tariffs to 15%, prompting speculation that the Bank of Japan may raise interest rates later this year. However, BOJ sources have signalled any hike would depend on how well Japan’s economy absorbs tariff-related shocks.

The euro held steady near $1.174, having risen 13.5% so far this year. It remained close to a four-year high of $1.183. The European Central Bank kept its key interest rate at 2% on Thursday, pausing after a year of easing while trade talks with the US continue.

Gold eased 0.3% to $3,356.75 per ounce, with futures down 0.4%, as optimism over trade negotiations weighed on demand. A weaker dollar helped cushion losses. Silver dipped 0.3% to $38.96 but remained up 2% on the week.

Brent crude added 0.3% to $69.38 per barrel, and WTI climbed to $66.23. This followed data showing US crude inventories fell by 3.2 million barrels, double analysts’ expectations, and despite reports that Venezuelan exports may rise following relaxed sanctions on PDVSA-linked firms like Chevron.