News Moving Wall Street: New Fed Chair? Also Tesla Robotaxi Hits Austin

Bloomberg Reports Bessent Could Replace Powell as Fed Chair

Bloomberg reported Tuesday that current Treasury Secretary Scott Bessent is a possible contender to replace current Federal Reserve Chair Jerome Powell. If the Bloomberg report is accurate, Bessent would likely face significant pushback.

First, a cornerstone of the Fed Chair position is that it is independent and free from influence from the President and other parts of government. With President Trump’s continuous suggestion that Powell has been too much of a “hawk” and has been far too slow in cutting interest rates, making the case for Bessent could be difficult. Second, though the President appoints the Fed Chair, they must be confirmed by the senate. Though the Republicans hold a majority in the Senate, that majority is razor thin. Regardless, talks are likely in the early stages, and Jerome Powell has said that he will serve out the remainder of his term, which does not expire until May 2026.

US-China Trade Talks Continue

Trade representatives from the world’s two largest economies sat down for a second straight day of talks in London. According to US Commerce Secretary Howard Lutnick, talks are progressing in a positive direction thus far. The two most powerful nations have seen “breakthrough” discussions on tech and rare earth exports (two of the strongest points of contention). Meanwhile, reports emerged today that the US and India are close to signing an interim trade deal after four days of negotiation.

First Tesla Robotaxi Spotted in Austin

Zacks Rank #5 (Strong Sell) stock Tesla (TSLA) and its controversial CEO, Elon Musk, have been in the news for all the wrong reasons recently. Musk, who served as a temporary “special government employee” and created the “Department of Government Efficiency” (DOGE) under the Trump Administration took to his X platform to voice his frustration about Trump’s “Big Beautiful Bill.” Musk argued that the bill is filled with “pork,” or reckless spending. However, Musk didn’t stop there. Instead, he resorted to personal attacks, suggesting that President Donald Trump was implicated in the Epstein Files, before deleting his tweet.

The most recent dust-up is just the latest in a flurry of frustrating headlines and “tape bombs” that have plagued Musk and Tesla recently. First, Musk and Tesla faced backlash and vandalism as left-leaning Americans believed Musk’s DOGE went too far with spending cuts. Second, Tesla investors have become increasingly frustrated as Tesla’s long-awaited robotaxi debut has seen numerous delays and doubts from Wall Street. However, after TSLA shares plunged last week and lost $150 billion in market cap in a single day (the largest one-day loss in TSLA history), shares are rebounding as each of the two recent issues seem to have resolutions:

• Musk Walks Back Trump Criticism: Earlier this week TSLA shares bounced after Musk retracted his Trump criticisms. Meanwhile, Trump commented on the situation saying he “Wishes Elon well.”
• Tesla Robotaxi Spotted in Texas: A driverless Tesla Model Y robotaxi was seen on a public road in Austin, Texas, for the first time Tuesday. After several posts circulated on Musk’s X, Musk commented, “These are unmodified Tesla cars coming straight from the factory, meaning that every Tesla coming out of our factories is capable of unsupervised self-driving.”

Meanwhile, while Alphabet’s (GOOGL) Waymo robotaxi service is off to a big lead versus Tesla, it’s not without problems. Several Waymo robotaxis were seen being driven by humans out of Los Angeles after many were lit on fire amid the recent riots. In addition, news stories broke recently in San Francisco about Waymo cars malfunctioning at night and honking for no reason, waking up nearby residents trying to sleep.

Trump Unveils “Invest America” Plan

On Monday, CEOs from Dell Technologies (DELL), Goldman Sachs (GS), and Uber Technologies (UBER) joined President Trump at the White House to announce the “Invest America” plan. The plan aims to democratize capitalism by giving newborn Americans a $1,000 investment account. You can read more about Invest America here.

CPI Due Wednesday Morning

To the surprise of many investors, inflation numbers have been moving in a positive direction despite the ongoing tariff policies and trade negotiations. That said, investors will get more information when the consumer price index (CPI) numbers are released Wednesday at 8:30 am EST.

Bottom Line

From the potential shifts in Fed leadership to the progress of global trade talks to Tesla’s latest moves, investors will be monitoring how these dynamic forces impact the financial landscape.

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This article originally published on Zacks Investment Research (zacks.com).

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