Breakfast News: Trump vs. Powell

Source: Image Created by Jester AI.

1. Fed Under Pressure

President Donald Trump's attention has turned to Federal Reserve Chair Jerome Powell, after he said Friday that interest rates would be falling "if we had a Fed Chairman that understood what he was doing." A day earlier, he claimed he has the power to remove Powell "real fast" if he wants. Opinion is divided over whether he can do it, but White House advisor Kevin Hassett said the president's team is examining the options. Former Fed Governor Kevin Warsh is being tipped as a contender to replace Powell when his term ends in May 2026 or sooner.

• "Central bank independence is so valuable": Will Compernolle at FHN Financial said the threats aren't helping U.S. asset confidence, as the dollar weakened with some hedge funds selling the currency Monday morning.
• Major indexes down more than 5% since April 2: Stock futures dipped early Monday after the S&P 500 dropped 1.5% in last week's shortened trading and the Nasdaq lost 2.6%.

2. China Trade War Escalates

China is ramping up retaliation to U.S. attempts to pressure trading partners into isolating the world's second-largest economy, accusing the White House of "unilateral bullying." Criticizing what it calls the "jungle rules" being adopted by the U.S., Beijing says it will respond strongly to any deals made at its expense.

• "Very good deal": The president remained upbeat on the prospects of a trade deal as China continues to say it's open to talks, even though some import levies on the country remain as high as 245%.
• Eastern uncertainty: Asian markets had a mixed Monday as China kept its central bank rates unchanged. Japan's Nikkei lost 1.3% after Finance Minister Katsunobu Kato said Thursday that he's "deeply concerned" about tariff fallout.

3. Tech Stocks in the Spotlight

Tesla (TSLA -0.13%) leads the "Magnificent 7" reporting season with first-quarter earnings due after market close on Tuesday, with the stock off more than 40% from its highs. Updates on the export outlook could be key, with Model S and Model X vehicles removed from the company's Chinese website. Any signs of Elon Musk's attention pivoting back to the company could help.

• Antitrust threats: Alphabet (GOOG -1.44%) posts on Thursday, against the background of a federal judge's ruling last week that Google illegally monopolized parts of the adtech market.
• Down 45% in the past year: Intel (INTC -1.61%) reports the same day. The stock dipped last week after Taiwan Semiconductor (TSM 0.13%) denied rumors that the two companies are in talks over a chipmaking joint venture. Eyes will be on new CEO Lip-Bu Tan's turnaround plans, which include a focus on catching up with artificial intelligence (AI) tech.

4. Foolish Earnings This Week

More than 120 S&P 500 companies are scheduled to report this week, including Intuitive Surgical (ISRG 0.21%) after Tuesday's closing bell. The robotic-assisted surgical tech pioneer has posted double-digit earnings beats in each of the last three quarters. The stock has gained 179% in five years.

• Up 274% in 10 years: Chipotle Mexican Grill (CMG 0.12%) reports Q1 on Wednesday, after earnings per share rose 20% in the final quarter of 2024 to hit analyst targets. Outlet expansion is planned in North America and globally.
• Q4 profit hit by hurricanes: We'll have a Q1 update from Kinsale Capital (KNSL 0.65%) Thursday, after the insurance company beat Q4 earnings estimates, though revenue fell short. Interest rate reductions could pressure written premium growth and investment income in 2025.

5. Next Up: Economic Events

The International Monetary Fund is set to update its global economic outlook Tuesday, with a general downgrade expected. Managing Director Kristalina Georgieva said, "Our new growth projections will include notable markdowns, but not recession."

• Global PMI figures: Wednesday brings April U.S. purchasing manager index updates, with manufacturing and services expected to decline slightly. Updates are due from Japan and Europe the same day.
• How do we feel?: We'll have a revised consumer sentiment report Friday, with no further deterioration currently predicted.

6. Foolish fun

When you look at where markets and investing are headed in the future, what excites you the most? Debate with friends and family, or become a member to hear what your fellow Fools are saying.