U.S. stocks traded higher as markets digested CPI data and President Trump walked back comments on the Fed Chair.

U.S. stock indices rose on Wednesday, July 16, with the Federal Reserve once again in focus. The Dow Jones Industrial Average gained 120 points, or 0.27%, boosted by strong earnings from major U.S. banks. Meanwhile, the S&P 500 and the Nasdaq posted more modest gains of 0.13% and 0.08%, respectively.

raders turned their attention to renewed tensions between the White House and the Federal Reserve. On July 16, President Trump denied earlier reports that he planned fire Fed Chair Jerome Powell. He stated that he is “not planning” to remove Powell, though he reiterated that the Chair was doing a “terrible job.”

Trump has continued to pressure the Fed to lower interest rates in an effort to stimulate the economy and lift the stock market. Most recently, the White House criticized the central bank over a $2.5 billion renovation project for two buildings in Washington.

The Fed remains hesitant to adjust interest rates due to persistent inflation concerns. The latest CPI data added to those fears, showing that consumers are beginning to feel the impact of Trump’s tariffs. In this environment, rate cuts appear unlikely, unless there is a significant shift in the Fed’s leadership.

Big banks profit despite fears over inflation

Strong earnings from major banking giants helped lift the stock market. Goldman Sachs, Bank of America, and Morgan Stanley all posted better-than-expected results. The banks also reported growing market share, fueled by positive loan growth.

This suggests that the current environment continues to favor large financial institutions with significant exposure to capital markets. Notably, Goldman Sachs is up 22% year to date, while JPMorgan has gained 19% over the same period.