Asian shares rise after Trump says he discussed firing Fed Chair Powell

Asian shares were mostly higher Thursday while US futures slipped after President Donald Trump rocked Wall Street by saying he had talked about the concept of firing the head of the Federal Reserve, but was unlikely to do so.

Removing Fed Chair Jerome Powell might help Wall Street get the lower interest rates investors love but would also risk a weakened Fed unable to make the unpopular moves needed to keep inflation under control.

Tokyo's Nikkei 225 index gained 0.6 per cent to 39,901.19 after the government reported a trade deficit for the first half of the year as Japan's exports to the United States took a hit from Trump's tariffs.

Chinese markets also gained. The Hang Seng in Hong Kong edged 0.1 per cent higher to 24,549.87, while the Shanghai Composite index gained 0.3 per cent to 3,516.31.

Australia's S&P/ASX 200 advanced 0.9 per cent to 8,639.00.

In South Korea, the Kospi climbed 0.2 per cent to 3,192.29. 

India's Sensex lost 0.1 per cent while the SET in Bangkok jumped 2.9 per cent on strong gains for market heavyweights like Airports of Thailand and Delta Electronics.

On Wednesday, the S&P 500 rose 0.3 per cent to 6,263.70. The Dow Jones Industrial Average added 0.5 per cent to 44,254.78, and the Nasdaq composite gained 0.3 per cent to 20,730.49 in a fresh record high.

Stocks were rising modestly in the morning before news reports saying that Trump was likely to fire Fed Chair Jerome Powell quickly sent the S&P 500 down by 0.7 per cent.

When later asked directly if he was planning to fire Powell, Trump said, I don't rule out anything, but I think it's highly unlikely. That helped calm the market, and stocks erased their losses, though Trump added that he could still fire Powell if he has to leave for fraud.

Trump has been criticising a $2.5 billion renovation project of the Fed's headquarters.

Trump is unhappy that the Fed has not cut interest rates this year, a move that would have made it easier for US households and businesses to get loans to buy houses, build factories and otherwise boost the economy. Lower interest rates could also help the US government, which is set to borrow and add a lot more to its debt after approving a wide range of tax cuts.

Powell has insisted he wants to wait for more data about how Trump's stiff proposed tariffs will affect the economy and inflation before the Fed makes its next move. 

The Fed has two main jobs: keeping the job market strong while keeping inflation under control. Lowering interest rates would help boost the economy but would also give inflation more fuel when tariffs may be set to push prices for US households higher.

A report on Wednesday said inflation at the wholesale level slowed to 2.3 per cent last month, which was better than economists expected. It's an encouraging signal, but it came a day after another report suggested that Trump's tariffs are pushing up the prices US shoppers are paying for toys, apparel and other imported products.

Trump's tariffs are making their weight felt across financial markets. Netherlands-based ASML, the world's leading supplier of chipmaking gear, has warned that it can't guarantee growth next year, after delivering an expected 15 per cent growth in sales for 2025.

ASML shares that trade in the United States fell 8.3 per cent.

GrabAGun, an online retailer of firearms and ammunition, swung sharply after combining with Colombier Acquisition Corp II and taking its spot on the stock market under the ticker symbol PEW. Donald Trump Jr, the son of President Trump, is joining the company's board.

The stock quickly went from an early gain of 19 per cent to a drop of 31 per cent before finishing with a loss of 23.9 per cent, with several halts in trading along the way.

In other dealings early Thursday, US benchmark crude oil gained 14 cents to $66.52 per barrel. Brent crude, the international standard, was up 6 cents at $68.58 per barrel.

The US dollar rose to 148.65 Japanese yen from 147.89 yen. The euro slipped to $1.1582 from $1.1641.