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U.S. stock index futures edged lower Tuesday as markets reacted to President Donald Trump’s abrupt dismissal of Federal Reserve Governor Lisa Cook, intensifying fears over political interference in the central bank.
At 05:55 ET (09:55 GMT), Dow Jones Futures fell 70 points, or 0.2%, S&P 500 Futures dropped 6 points, or 0.1%, and Nasdaq 100 Futures slipped 19 points, or 0.1%. The major indices had closed lower on Monday, with the Dow Jones Industrial Average down 0.8%, the S&P 500 off 0.4%, and the NASDAQ Composite slipping 0.2% following Friday’s strong rally.
Trump’s Fed Moves Rattle Markets
Trump announced Cook’s removal via social media, citing allegations of mortgage fraud raised earlier in August by the Federal Housing Finance Agency. Cook denied the claims, describing her dismissal as unlawful. The firing is the latest in a series of Trump actions perceived as attempts to influence monetary policy, following earlier efforts to pressure Fed Chair Jerome Powell to cut rates more aggressively.
Markets are now pricing in heightened uncertainty over the Fed’s independence, with political interference threatening to undermine confidence in U.S. monetary credibility. Cook’s departure from the seven-member rate-setting board underscores the risks of a politicized Fed at a time when investors are closely watching interest-rate expectations.
Economic Data and Earnings in Focus
Investors will also digest July durable goods orders, consumer confidence data, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index later in the session. Richmond Fed President Thomas Barkin is scheduled to speak, while Thursday will bring the second estimate of Q2 GDP and the latest weekly jobless claims. HSBC economists project a revision of annualized Q2 GDP growth to 3.2%, up from the initial 3.0%, with consumer sentiment expected to remain subdued and durable goods orders likely showing contraction.
Meanwhile, attention turns to Nvidia (NASDAQ: NVDA) ahead of Wednesday’s earnings release. The AI giant is expected to report a 48% jump in EPS on revenue of $45.9 billion for its fiscal Q2, providing a key barometer for the tech and AI sectors. Market caution follows last week’s tech sell-off amid growing doubts over the sustainability of AI-driven growth, even as S&P 500 Q2 profits track a 12.9% year-on-year increase, exceeding early July forecasts of 5.8%, according to LSEG IBES.
