Wall Street gains as Trump’s interim Fed choice stokes dovish bets

Wall Street rose on Friday, setting up a strong finish to the week, after President Donald Trump's interim pick for a Fed governor post fueled expectations of a more dovish policy ahead.

At 9:34 a.m. ET, the Dow Jones Industrial Average rose 134.42 points, or 0.31%, to 44,103.06, the S&P 500 gained 17.22 points, or 0.27%, to 6,357.22 and the Nasdaq Composite advanced 44.83 points, or 0.21%, to 21,287.53.

Trump moved to reshape the Fed on Thursday, nominating Council of Economic Advisers' chair Stephen Miran for a short-term board seat after Adriana Kugler's abrupt exit—and narrowing his shortlist to replace Jerome Powell, whose term ends May 15.

On the same day, Bloomberg News reported that Fed Governor Christopher Waller was emerging as a leading contender for the chair.

Investors were being whipsawed by mixed signals over the Fed's future, as Trump's pressure stirs worries about the central bank's independence and a potential leadership reshuffle that could skew policy looser.

"The reality is the president can't force a chair to step down or put any additional pressure to make the governors to force rates lower. This is about him putting in folks who are going to be more dovish and ultimately (lead) to deeper rate cuts, whether they're justified or not," said Phil Blancato, CEO, Ladenburg Thalmann Asset Management.

In earnings-related moves, Expedia leapt 9.7% after raising its annual forecast for gross bookings and revenue growth.

Monster Beverage gained 9% as the company beat estimates for its second-quarter results.

Gilead Sciences jumped 8.9% following its raising of the full-year financial outlook.

Trade Desk sank 38% in after the ad-tech firm reported a sharp slowdown in second-quarter revenue growth.

Pinterest tumbled 11.5% as the social media platform missed analysts' estimates for second-quarter profit.

Sector-wise, consumer discretionary could top the leaderboard this week, while healthcare lags, weighed down mainly by Eli Lilly. The drugmaker fell 14.1% in the previous session after results from a late-stage study on its experimental GLP-1 pill fell behind that of Novo Nordisk's.

On the day, all sectors were trading in the green.

Meanwhile, both the S&P 500 and the Nasdaq were on track for their best week in over a month, while the Dow was on track to log modest gains. Equities have ridden a dramatic reset in rate expectations and a flurry of upbeat earnings.

Traders now peg a 90% chance of the first rate cut hitting next month, according CME's Fedwatch tool, with futures pointing to at least two cuts by year-end.

U.S. tariffs on a bunch of trading partners took effect at midnight on Thursday. Tokyo's trade negotiator said Washington will amend a presidential executive order to remove overlapping tariffs on Japanese goods, terming it as oversight.

In a rebuke to Washington, New Delhi shelved fresh U.S. arms and aircraft purchases, according to three Indian officials, after Trump-era tariffs pushed relations to their lowest point in years.

St. Louis Fed President Alberto Musalem is scheduled to speak later at 10:20 a.m. ET.

Advancing issues outnumbered decliners by a 2.33-to-1 ratio on the NYSE and by a 1.63-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and two new lows, while the Nasdaq Composite recorded 38 new highs and 32 new lows.

(Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Maju Samuel)