Market Holds Steady as PPI Cools and Earnings Roll In, Despite Powell Drama

U.S. stocks traded in a relatively steady range on Friday as investors digested encouraging inflation data, a fresh wave of bank earnings, and a sudden jolt of political headline risk.

The June Producer Price Index (PPI) and Core PPI came in flat month-over-month and showed a year-over-year slowdown compared to May, reinforcing the disinflation narrative. The data was seen as a positive for markets, particularly because PPI feeds into the Fed’s preferred inflation measure—core PCE. Bond yields responded accordingly, with the 10-year Treasury yield slipping as much as five basis points to 4.44%.

While the inflation data set a calm tone early in the session, volatility picked up late in the morning after reports emerged suggesting President Trump might fire Federal Reserve Chair Jerome Powell. The president later tempered the speculation during a brief press appearance, saying it was “highly unlikely” he would take such action—unless “fraud” were involved.

Despite the headline scare, financials rallied on the back of strong second-quarter earnings from several major banks. Goldman Sachs led the way with a 0.9% gain after beating earnings expectations, even as Bank of America and Morgan Stanley pulled back modestly on “sell-the-news” reactions.

Tech stocks opened on the back foot, weighed down by an 8.3% drop in ASML after the chip equipment maker beat Q2 forecasts but offered a murky outlook for FY26. That dragged down the PHLX Semiconductor Index by 0.4%, though the broader tech sector managed to recover into the green by the close.

Healthcare stocks stood out as the day’s leaders, bolstered by Johnson & Johnson’s strong Q2 report and a guidance raise that sent its stock up over 6%. Real estate shares also posted solid gains as falling yields provided a tailwind.

Overall, eight of the eleven S&P 500 sectors ended in positive territory. The market enjoyed broad-based support, with small-cap stocks notably outperforming—lifting the Russell 2000 by 1.0%. The S&P 500 added 0.3% on a market-cap basis, closely mirroring the equal-weighted version’s 0.4% advance.

Despite some headline drama, the market’s underlying tone remained constructive, buoyed by falling rates, solid earnings, and a cooling inflation backdrop.

Our FTinvest 11 portfolio came under renewed pressure at the open today but showed impressive resilience as the session progressed. After a shaky start, the index managed to rebound and even posted modest gains during the day, briefly entering positive territory.

However, that upward momentum proved short-lived. As market sentiment softened toward the close, the index gave back nearly all of its intraday gains, finishing the day just a hair above the flatline. FTinvest 11 ended with a marginal increase of 0.03%, closing at 792.39.

While today’s performance lacked direction, the portfolio’s ability to hold steady in the face of early selling pressure is a sign of underlying stability.