Wall Street Hits Pause as Investors Weigh Geopolitical Risks and Fed Outlook

U.S. stocks stalled midweek, halting a two-day rally as investors cautiously monitored a fragile ceasefire between Israel and Iran. At the same time, all eyes remained on Capitol Hill, where Federal Reserve Chair Jerome Powell continued his testimony before Congress.

Tech Still Takes the Lead

Technology shares once again led the pack, pushing the Nasdaq higher. Meanwhile, the broader S&P 500 index closed virtually flat, holding near its all-time closing high set on February 19.

The Dow Jones, however, edged lower, reflecting cautious sentiment among blue-chip investors.

Nvidia Surges to the Top

Chip giant Nvidia continued its meteoric rise, setting a new all-time high. The company's market valuation soared to an astounding 3.75 trillion dollars, officially making it the most valuable public company in the world.

Sector Winners and Losers

Of the 11 major S&P 500 sectors, technology, communication services, and healthcare posted gains. Defensive sectors — including real estate, consumer staples, and utilities — lagged behind the broader market.

Index Summary

• Dow Jones: fell 106.59 points, or 0.25%, to 42,982.43;
• S&P 500: dipped by just 0.02 points, remaining steady at 6,092.16;
• Nasdaq Composite: rose 61.02 points, or 0.31%, to 19,973.55.

Trump Declares Victory, Markets Wait for Clarity

President Donald Trump declared a U.S. "victory" in its confrontation with Iran, even though the scope of the damage to Iran's nuclear infrastructure remains unclear. Market participants, however, are adopting a wait-and-see approach, preferring hard facts over political statements.

Powell Urges Patience: Fed Holds Off on Rate Cuts Amid Tariff Uncertainty

In his second consecutive day of testimony before the U.S. Senate Banking Committee, Federal Reserve Chair Jerome Powell reiterated that the central bank is in no rush to lower interest rates. He emphasized that policymakers prefer to wait for more clarity on how Donald Trump's sweeping tariffs could affect inflation before moving forward.

Market Bets Point to September for First Cut

According to the CME FedWatch tool, markets currently assign only a 25 percent chance to a rate cut at the July policy meeting. However, the probability of a reduction in September stands significantly higher, at 67 percent.

Housing Data Signals Cooling Demand

Recent housing figures showed a sharp drop in demand. Sales of newly built homes fell by 13.7 percent, and mortgage applications also declined, as borrowing costs nudged higher. The uptick in mortgage rates has begun to weigh on buyer activity.

Key Economic Reports on the Horizon

Investors are closely watching Thursday's final GDP report for the first quarter, expected from the Department of Commerce. Even more anticipation surrounds Friday's release of the Personal Consumption Expenditures index. This data will provide a crucial update on consumer behavior and underlying inflation trends.

Tesla Struggles in Europe

Shares of Tesla slid by 3.8 percent after data showed European sales declining for a fifth straight month. The ongoing weakness in one of the company's key markets continues to concern investors.

Weak Guidance Hits FedEx and General Mills

Economic uncertainty is beginning to reflect in corporate forecasts. FedEx stock lost 3.3 percent after the logistics giant issued a lower-than-expected profit forecast, citing weakened global demand driven by trade tariffs. Rival UPS also saw its shares dip by 1.2 percent.

Meanwhile, food conglomerate General Mills disappointed the market with a gloomy earnings outlook, leading to a 5.1 percent drop in its stock price.

BlackBerry and Micron Rally on Strong Revenue Outlooks

Shares of cybersecurity firm BlackBerry surged by 12.5 percent after the company raised its revenue forecast, citing steady demand for its services. Meanwhile, chipmaker Micron Technology also saw a significant boost, with its stock jumping over 5 percent in after-hours trading. The catalyst: a stronger-than-expected revenue projection for the upcoming fourth quarter.

Fed in the Crosshairs: Trump Reportedly Eyes Early Powell Replacement

The US dollar came under pressure Thursday following media reports suggesting that President Donald Trump may be considering naming a successor to Federal Reserve Chair Jerome Powell as early as September or October. The news triggered a wave of dollar selling, fueling market uncertainty.

Analysts warn that such a move could be interpreted as an attempt to exert influence over monetary policy through a de facto replacement long before Powell's term officially ends in May 2026. Concerns over the Federal Reserve's independence and credibility have re-emerged as a result.

Asian Markets Hold Steady Amid US Uncertainty

Despite the backdrop of political maneuvering in Washington, Asian equities held firm. The MSCI index tracking Asia-Pacific stocks outside Japan posted modest gains as Wall Street's rally temporarily paused overnight. Japan's Nikkei rose 1.5 percent, reaching its highest level since late January.

Euro Soars as Dollar Weakens

Currency markets turned their attention to the euro, which climbed to its highest level since September 2021. The euro was last quoted at 1.6837 dollars, a move reflecting the dollar's recent softness and rising caution among global investors facing growing political and economic crosswinds in the United States.

Safe-Haven Surge: Swiss Franc Hits Decade High, Yen Gains Ground

The Swiss franc soared to its strongest level in ten years, reinforcing its reputation as a safe-haven currency amid global market tensions. Meanwhile, the Japanese yen appreciated by 0.3 percent, reaching 144.815 against the US dollar.

Dollar Declines Sharply: Lowest Since March 2022

The US Dollar Index, which tracks the greenback against a basket of six major currencies, fell to its lowest point since March 2022. So far this year, the index has dropped by 10 percent as investors grow increasingly wary of Donald Trump's tariff agenda and its potential drag on US economic momentum.

Bond Yields Retreat: Market Prices in Rate Cut Expectations

Yields on two-year US Treasury notes, often seen as a barometer for interest rate expectations, dipped by 1.5 basis points to 3.764 percent. This marks the lowest level in seven weeks and reflects market sentiment shifting toward potential monetary easing.

Oil Prices Edge Higher: Geopolitical Risks Linger

Oil prices extended their rebound on Thursday, shaking off a turbulent month marked by conflict between Israel and Iran. Brent crude futures climbed 0.37 percent to 67.93 dollars per barrel, while US benchmark WTI rose 0.45 percent to 65.21 dollars, as traders reassessed geopolitical supply risks.