3 Stocks We’re Eyeing as Trump’s Attack on Powell Threatens Market

As you know, we normally try to steer clear of politics when it comes to the Portfolio, preferring to focus on the impact of passed policy as well as economic and other data points.

However, following today’s July CPI report that showed Core CPI ticked higher than expected and not bringing support for the Fed to deliver multiple rate cuts later this year, President Trump is back at it again on Truth Social threatening Fed Chair Powell with a “major lawsuit” over mismanagement of major renovations at the Fed’s Washington, D.C. headquarters. In the same post, Trump also said, “Jerome 'Too Late' Powell must NOW lower the rate.”

It seems rather apparent that Trump, in a thinly veiled way, is attempting to pressure Powell to deliver rate cuts or go after him in such a way that Trump could replace him before his current term expires in May 2026. In a speech today, Federal Reserve Bank of Richmond President Tom Barkin indicated he would need to see more data and, as greater visibility is had as to whether there is more inflation pressure or pressure on unemployment, the Fed can act accordingly.

As we indicated in today’s video, that’s what we’ll be doing – following the data between now and the Fed’s September policy meeting, updating our expectation for rate cuts along the way. The movement in the Core CPI data between May, June and July doesn’t help the cause for rate cuts. Next up: the July PPI report and next week’s August Flash PMI data.

Getting back to Trump and Powell, the concern we have is that if this angle of attack is pursued, it could rekindle the pressure we saw several weeks ago in the market when Trump went after Powell, threatening to fire him. The consensus is that firing Powell would be a mistake, and we’re in that camp, especially after Trump’s efforts to shake up the Bureau of Labor Statistics (BLS) following the sharp May and June revisions found in the July Employment Report. To that, we are also seeing headlines that Trump’s BLS candidate E.J. Antoni suggested suspending the agency’s closely watched monthly jobs report, arguing that its underlying methodology, economic modeling and statistical assumptions are fundamentally flawed.

To be clear, it’s the rekindling of market uncertainty during one of the seasonally weakest times of the year for the market that is our concern. It is possible that we see Trump do yet another flip-flop on Powell, sort of like the one he just did regarding Intel INTC CEO Lip-Bu Tan, especially if Treasury Secretary Scott Bessent is once again able to rein Trump in. Bessent is expected to be interviewed today at 4 p.m. ET, and we will see if he can once again soothe market concerns.

If we do see investor uncertainty deliver a pullback in the market, it would give us a chance to put some capital back to work, following our recent exit of Elastic ESTC shares as we get ready for the approaching final sprint to the end of 2025.

Following Tuesday's move to add some additional shares of American Express AXP, two positions we are watching closely with an eye toward adding back shares are ServiceNow NOW and Axon AXON. We are also interested in picking up more shares of SuRo Capital SSSS to capture more of the pending dividend stream between now and year-end.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long AXP, NOW, AXON and SSSS.