By Kanchana Chakravarty and Nikhil Sharma

(Reuters) – The S&P 500 and Nasdaq approached record highs on Thursday, driven by President Trump’s frustration with the Federal Reserve’s reluctance to cut interest rates, increasing speculation of upcoming monetary policy easing.

A Wall Street Journal report indicated that Trump is considering replacing Federal Reserve Chair Jerome Powell as early as September or October, criticizing him for not acting sooner to reduce rates.

Traders project a nearly 25% likelihood of a rate cut in July, compared to 12.5% last week, according to CME Group’s FedWatch tool.

The benchmark S&P 500 traded 0.5% below its peak, while the tech-heavy Nasdaq was 0.7% from its high, buoyed by a recent truce in the Middle East conflict.

The Nasdaq 100, a component of the Nasdaq, reached an intraday record high.

Economic data presented a mixed picture. The final reading from the U.S. Commerce Department revealed that gross domestic product contracted by 0.5% in the first quarter, worse than the 0.2% contraction anticipated by economists surveyed by Reuters.

“A 0.5% contraction is worse than expected, but it reflects how much imports overwhelmed exports in the first quarter, as businesses and consumers tried to get ahead of the tariff program,” stated Sam Stovall, chief investment strategist at CFRA Research.

In a related matter, a report indicated a drop in weekly jobless claims as fewer Americans filed new applications for unemployment benefits.

Fed San Francisco President Mary Daly noted that there is growing evidence suggesting tariffs may not lead to a significant or sustained inflation increase, which supports the case for a rate cut in the fall, according to Bloomberg News.

The Personal Consumption Expenditures report due Friday, the Fed’s preferred inflation gauge, will be analyzed for tariff-induced price changes within the U.S. economy.

At 10:11 a.m. ET, the Dow Jones Industrial Average increased by 149.52 points, or 0.35%, to 43,133.31; the S&P 500 rose by 23.61 points, or 0.39%, to 6,115.77; and the Nasdaq Composite climbed 83.54 points, or 0.42%, to 20,056.37.

Ten of the 11 major S&P 500 sectors registered gains, with materials leading the rise at 0.8%. Conversely, real estate stocks experienced a decline of 0.8%.

Nvidia (NASDAQ:NVDA) saw a 1% increase after reaching a new all-time high on Wednesday.

Shares of sportswear company Nike (NYSE:NKE) rose by 0.8% ahead of their quarterly results.

Copper miners benefited from a surge in copper prices, reaching a three-month high. Freeport McMoRan climbed 6%, while Southern Copper (NYSE:SCCO) advanced by 6.3%.

Advancing issues outnumbered declining ones with a ratio of 3.01-to-1 on the NYSE and 1.56-to-1 on the Nasdaq.

The S&P 500 marked 23 new 52-week highs and 2 new lows, while the Nasdaq Composite recorded 44 new highs and 29 new lows.