U.S. stocks were largely flat on Tuesday morning, as Wall Street looked for a positive flip despite the uncertainty seeping into the market amid President Donald Trump’s move to fire Federal Reserve governor Lisa Cook.
- Stocks opened flat on Tuesday, with major gauges at risk of extending weakness seen in the previous session.
- As Dow Jones Industrial Average shed 100 points, Bitcoin mirrored losses to drop below $110k.
- U.S. President Donald Trump has ordered removal of Federal Reserve governor Lisa Cook.
The Dow Jones Industrial Average opened 25 points down, while the S&P 500 shed 0.03% and the Nasdaq Composite hovered at the flatline, with Wall Street bidding to avoid further losses after stocks retreated on Monday.
Stocks recently spiked to record highs, driven by Federal Reserve chair Jerome Powell’s Jackson Hole speech.
However, a pullback across stocks is also cascading into cryptocurrencies, with Bitcoin (BTC) dropping below $110,000 to leave bulls at risk of a fresh carnage.
With investors taking note of President Donald Trump’s move to fire Fed governor Lisa Cook, there was also a reaction in the bond market. The U.S. Treasury yields market saw short-term yields fall, while long-term yields rose. As the 2-year yield moved 3 basis points lower to 3.70%, the 10-year yield jumped to 4.3% and the 30-year yield jumped to 4.9%.
Wall Street weighs Trump’s Fed move
President Trump announced his move to fire Cook via Truth Social late Monday, a new angle to the U.S. president’s feud with the central bank. For much of the year, Trump has criticized Fed chair Jerome Powell, with calls for him to cut interest rates.
He posted on Truth Social that Cook had to go amid “sufficient cause” for her removal over fraud allegations. However, Cook maintains she won’t step down and that Trump doesn’t have authority to oust her.
Trump’s move has experts opining that successfully removing Cook could expose other governors to similar scenarios.
According to Michael Feroli, chief U.S. economist at JPMorgan, said in a note that firing Cook will contribute to “upside inflation risks.”
The Trump-Fed feud is among market factors investors will keenly watch this week. Others are economic data reports, tariffs, global geopolitical trends, and earnings. The Fed’s preferred inflation gauge, the personal consumption expenditures price index, drops this week, as do Nvidia’s earnings.
NVIDIA’s results are set for Wednesday, Aug. 27.
