At first markets dropped over a Bloomberg report in which a White House official said Trump was close to firing Powell from his role leading the central bank. Markets treated that as a sign that there would only be more uncertainty ahead. 

Later, Trump denied the report, telling reporters it was “highly unlikely” he would fire Powell. That sent markets shooting back up on the grounds they could continue to rely on the stability of the Fed and therefore the U.S. 

Adding confusion to the fate of Powell’s position was a separate report in the New York Times that Trump had reportedly drafted a letter to fire the Fed chair, which he had reportedly shown to House Republicans during a White House meeting late Tuesday night. 

Despite the topsy turvy trading in the early hours of the session, stocks ended Wednesday up. All the major indices recovered from their morning scares to finish the day positive. The S&P 500 closed up 0.3%. The Dow Jones made up ground starting in the late morning to close 231 above the open. And the Nasdaq, which was coming off a record-high, ended Wednesday 0.3% higher. 

All three indices had seen precipitous drops earlier in the day after the news of Powell’s imminent firing broke. The S&P sank 0.6%, the Dow fell 264 points, and the Nasdaq took the worst of it, sliding down 0.8%. 

Wall Street had hinted that investors would not take kindly to Powell being relieved of his duties. Wednesday’s mid-morning volatility is further evidence that investors would not welcome the move. Murmurings of Powell’s firing alone caused a minor, albeit brief freefall in stock prices. 

Trump has wanted Powell gone for months. The president is furious with him for having slowed his rate-cutting cycle that began in the fall of 2024. Since the start of the year, Powell has held off on lowering interest rates further because he says the Fed has the luxury of waiting to see how things play out in the economy. Most forecasts for this year anticipate higher inflation and lower growth than initially expected this year as a result of Trump’s tariffs.

That patience has only earned Powell the president’s wrath. Trump has repeatedly stated he wants lower interest rates because it will reduce the interest payments on the national debt. At the Wednesday press conference in which Trump said he wasn’t likely to axe Powell, he did push him on rates. 

“He’s got a very easy job to do,” Trump said of Powell. “You know what he has to do? Lower interest rates.”