Markets Rally Despite Trump's Escalating Criticism of Fed Chair Powell

The S&P 500 rose 1.3% to close at 5,412.78, marking its third consecutive daily gain, while the Nasdaq Composite advanced 1.8%. The rally occurred despite former President Donald Trump’s renewed public criticism of Federal Reserve Chair Jerome Powell, who has maintained a cautious stance on interest rates amid persistent inflation. Trump's remarks, aired on a major cable news network, accused Powell of undermining economic growth and called for tighter oversight of the central bank. Despite the political headwinds, the U.S. dollar strengthened slightly, with the DXY index rising to 105.62, indicating continued confidence in the nation’s fiscal and monetary framework. Bond yields remained stable, with the 10-year Treasury yield holding steady at 4.31%, suggesting markets are not pricing in immediate rate cuts or policy shifts. The resilience of financial markets underscores investor confidence that the Fed will maintain its data-dependent approach. Technology stocks drove the rally, with TSLA surging 5.1% and AAPL adding 2.7%. Analysts attribute the outperformance to strong product launches and improved sentiment around AI-driven revenue growth. The broader market’s ability to absorb political noise reflects a shift toward risk-on positioning, particularly in growth sectors. Market participants appear focused on corporate earnings and economic fundamentals rather than short-term political commentary. The divergence between political rhetoric and market behavior suggests that investors may be hedging against uncertainty by betting on stability. By reinforcing positions in high-quality equities and maintaining exposure to U.S. assets, traders appear to be positioning for continuity in monetary policy, regardless of political pressure.