President Trump's decision is the first time in nearly 40 years that a new president hasn't asked the incumbent – in this case, Janet Yellen – to stay on for another term.
President Donald Trump confirmed most predictions of a change at the head of the US Federal Reserve while Wall Street bounced back from a sharp fall early in the session.
Jerome (Jay) Powell will be the next chairman from early next year, subject to Senate confirmation.
Mr Trump says Mr Powell, already a Fed governor, has the “wisdom and leadership” to guide the economy through any turbulence that arises.
It is the first time in nearly 40 years that a new president hasn’t asked the incumbent – in this case, Janet Yellen – to stay on for another term.
In five years at the Fed, Mr Powell has been a Yellen ally and he is expected to continue the Fed’s approach of reversing the central bank’s stimulus policies as the economy expands.
Meanwhile, blue chip stocks on Wall Street ended the session of a high note after the Dow Jones Industrial Average earlier plunged more than 80 points as details of a federal tax plan were revealed.
The Dow then recovered to finish 81.25 points up, or 0.35%, at 23,516.26.
But other stocks were mixed. The Nasdaq Composite Index eased less than two points to 6714.94 and the Standard & Poor’s 500 Index rose 0.02% to 2579.85.
Declines in shares of home builders and other consumer-discretionary stocks kept pressure on the S&P 500.
Corporate tax drop plans
The tax plan aims to permanently chop the corporate tax rate, compress the number of individual income tax brackets and eventually repeal the taxes paid by large estates.
Components for individual taxpayers, such as limits on the home mortgage-interest deduction and caps on property tax deductions, contributed to moves among consumer stocks, specifically home builders, analysts said.
“There’s a general disappointment in the individual side of things,” Yousef Abbasi, global market strategist at JonesTrading, told Dow Jones. “The biggest tax cut went to the corporations.”
Home builder Lennar fell 3.4%, while PulteGroup shed 1.6%. Home-improvement companies were dragged down, too, with Home Depot shares falling 1.8% and Lowe’s declining 3.9%.
However, financial stocks in the S&P 500 rose 0.6%, with some analysts saying the proposal to cut the corporate tax rate to 20% from 35% would be a boon for banks.
US government bonds gained. The yield on the 10-year Treasury note fell to 2.347% from 2.378% on Wednesday.
Facebook, which remains under scrutiny over alleged Russian propagandists’ activity during the election, was down 2% after reporting a jump in profit.
Shares of Blue Apron sank 19% after the meal-kit company posted a loss and shed customers in the third quarter.
The Stoxx Europe 600 fell 0.5%. The UK FTSE 100 rose 0.9%, France’s CAC 40 fell 0.07% and Germany’s DAX fell 0.2%.
