Markets had turned volatile in late morning trading with stocks losing ground, the dollar selling off sharply, and gold prices spiking on fears Trump was seeking to remove the central bank chief

Equity indexes advanced slightly on Wednesday while the dollar fell with U.S. bond yields, as markets calmed after U.S. President Donald Trump said he was “highly unlikely” to fire Federal Reserve Chair Jerome Powell.

Markets had turned volatile in late morning trading with stocks losing ground, the dollar selling off sharply, and gold prices spiking on fears Trump was seeking to remove the central bank chief. But investors reversed course after Trump contradicted a Bloomberg report that he was planning to oust Powell.

However, the president said he had spoken with some Republican lawmakers about the idea and unleashed fresh criticism against Powell while declining to completely reject the possibility of switching out the Fed chair, whose term is up in May 2026.

Powell has faced frequent public criticism from Trump as the central bank has kept interest rates steady while it monitors the inflationary impact from tariffs. The president has railed against Powell for not cutting rates sooner, prompting concern about whether the Fed’s independence could be eroded.

While the market would respond negatively to Powell’s ouster, Gene Goldman, chief investment officer at Cetera Investment Management, noted it would take some time to remove the policymaker, who has just one vote out of 12 on monetary policy changes. But he sees plenty more investor worries.

The markets remain very jittery. We have high valuations, and it’s the beginning of earnings season with OK but not great bank earnings, said Goldman. He also pointed to a bearish outlook from Dutch company ASML as clients of the world’s biggest supplier of computer chip-making equipment await clarity on U.S. tariffs before making big purchases.

He added: ASML’s cautious outlook is not a great indicator for the semiconductor industry. And inflation reports have not equivocally given any suggestion that the Fed should cut rates any time soon.