Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed slightly lower on Friday following several announcements from President Trump. The stock market will be closed on Monday, January 19 in honor of Martin Luther King Jr. Day.
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President Trump’s interest in acquiring Greenland has risen substantially since the U.S. successfully captured Venezuelan President Nicolás Maduro. Now, he’s considering imposing a tariff on countries that don’t support that goal. “I may put on a tariff on countries if they don’t go along with Greenland because we need Greenland for national security,” Trump said at a healthcare roundtable event without mentioning a timeline or a specific rate.
Furthermore, Trump stated that he prefers White House National Economic Council Director Kevin Hassett, a top contender to replace Fed Chair Jerome Powell, to remain in his current role. Following his comment, Hassett’s odds of being nominated plunged to 17% from 31% on the prediction platform Polymarket. On the other hand, former Fed Governor Kevin Warsh’s odds climbed to 59% from 34%. Trump has communicated to allies that he appreciates Hassett’s tendency to support his policies on television, according to The Wall Street Journal.
Earlier in the day, Hassett downplayed the Department of Justice’s investigation into Fed Chair Jerome Powell over the central bank’s costly renovation of its Washington, D.C., headquarters. “The bottom line is, I expect, you know, Jay is a good man – I expect that there’s nothing to see here, that the cost overruns are related to things like asbestos, as he says,” Hassett told Fox News.
Powell has received an outpouring of support from economic leaders around the world after he disclosed the investigation against him, framing it as a pretext for the Fed setting monetary policy independently instead of favoring Trump’s preferences for lower rates.
Elsewhere, Federal Reserve Vice Chair for Supervision Michelle Bowman warned of a “sharp correction in equity prices” if AI investments result in lackluster returns. At the same time, she also cited AI as a contributor to rising productivity, which factored into her willingness to cut rates last year. Bowman added that she supports additional interest rate cuts in order to support a fragile labor market. The Fed is set to meet for its first Federal Open Market Committee (FOMC) meeting of the year on January 28.
The S&P 500 (SPX) closed with a 0.06% loss, while the Nasdaq 100 (NDX) fell by 0.07%.
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