Stocks Edge Higher Amid Federal Reserve Chair Rumors

In a mixed day of trading, Wall Street saw modest gains, closing slightly higher as the Nasdaq Composite finished at a new record. Investor nerves were tested by reports suggesting President Trump might dismiss Federal Reserve Chair Jerome Powell. The market briefly dipped more than 1% before rebounding later in the day.

Despite quick denials from President Trump, the speculation about Federal Reserve leadership had an impact. "The Fed's independence is hugely important to our overall economy, so you saw the market react when that initial headline came out," remarked Dylan Bell, chief investment officer at CalBay Investments. The Nasdaq closed at 20,730.49, up 0.26%, while both the Dow and S&P 500 also posted gains.

The rumors highlighted ongoing investor concerns about economic policy, especially regarding interest rates. Trump's frequent criticism of Powell for not cutting rates appears to weigh heavily on markets. Yet, positive economic indicators and strong earnings reports from banks kept investor sentiment buoyant, even as volatility remained a factor.

(With inputs from agencies.)